USDJPY The yen dropped to almost a seven-year low versus the dollar as central banks worldwide add to monetary stimulus, damping demand for low-yielding haven assets such as Japan’s. The stimulus moves “should keep risky assets well-supported, and by corollary, weaken the yen,” said Peter Kinsella, a senior currency strategist at Commerzbank AG in London. “The yen will probably weaken toward 125 against the dollar by the end of next year, if not before. The key catalyst is the combination of further BOJ easing and U.S. monetary policy normalization.” Prime Minister Shinzo Abe’s administration implemented a higher sales tax in April to boost revenue as government liabilities ballooned to 1 quadrillion yen ($8.5 trillion), more than double the nation’s yearly economic output. Japan’s borrowings stand at 226 percent of gross domestic product, the largest debt burden in the world, according to data compiled by Bloomberg. Greece has the second largest, equal to 175 percent of its economy.
Posted on: Tue, 25 Nov 2014 10:00:38 +0000
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