Forex - EUR/JPY sharply higher on BOJ yen move
Published Aug 03, 2011 11:02PM ET
In early Asian trade EUR/JPY hit 110.26, the pair’s lowest since July 29; the pair subsequently consolidated at 112.87, surging 2.27%.
The pair was likely to find support at 110.26, the day’s low, and resistance at 113.19, the high from July 21.
Approaching mid-day trading, the Japanese yen plummeted against its major counterparts in a matter of minutes, prompting speculation that the Bank of Japan had intervened to weaken a persistently strong Japanese currency.
Bank of Japan Gov. Masaaki Shirakawa later confirmed intervention on the part of the government saying that the central bank "strongly expects that the action taken by the Ministry of Finance in the foreign exchange market will contribute to stable price formation in the market."
The BOJ move comes a day after the Swiss National Bank cut its key lending rate and took further measures to prevent the Swiss franc from rising beyond record-level highs against the U.S. dollar.
Meanwhile the yen moved sharply lower against both the U.S. dollar and the British pound with USD/JPY up 1.93% to hit 112.55, and GBP/JPY climbing 1.89% to hit 128.97.
The European Central Bank was scheduled to hold its monthly news conference Thursday, where market expectations were for the ECB to maintain short term interest rates at 1.5%.
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Written By: Investing.com
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