Yen drops against US dollar

The yen has ended near its lowest level in four years against the US dollar after the Bank of Japan announced last week that it will be implementing an ambitious monetary policy in order to boost the economy. The dollar is currently hovering around the 99 yen mark after earlier moving as high as 99.67 yen.

According to some analysts there is no reason not to believe the US currency will top 100 yen before the end of the week. The dollar has risen around seven per cent against the Japanese currency since last Thursday’s announcement that the BoJ intends to push 1.4 trillion yen into the country’s economy in an effort to combat deflation.

The move is more ambitious than many investors previously predicted and has resulted in some adjusting bets in favour of the dollar. Societe Generale director of forex, Kyosuke Suzuki, said the strong commitment by the BoJ has stimulated dollar-yen activity.

Larger than expected Chinese imports means the Australian dollar is up 0.3 per cent to $1.0518. A surge of 14.1 per cent on imports has exceeded exports leading to a mild trade deficit. The euro is steady against the yen having shed 0.1 per cent to settle at 129.53.

The single currency is also steady against the US dollar at $1.3087.