Since August of this year, economic growth in Europe and America due to sluggish domestic demand, the U.S. proposed plan to double exports to allow the weak dollar, European financial authorities to promote moderate currency depreciation, led the yen soared, causing the yen against the dollar most of the time at high of about 85 to 1.
Appreciation of the yen makes Japanese exports of enterprise performance impairment, more severe deflation. Japan's ruling and opposition concerns, Japan's economic recovery process will be hampered, and bear the downside risk. To address this situation, the Japanese government and central bank adopted a series of measures to prevent the appreciation of the yen to stimulate economic growth.
August 30 this year, the Bank of Japan decided to open operations by means of injection to the market size from the original 20 trillion yen to 30 trillion yen. September 10, the Japanese government officially announced that it will adopt a scale of 915 billion yen in the new economic stimulus plan to promote employment and stimulate consumption, the risks should the yen appreciate. However, these two measures did not play as expected, the yen is still more than 1 in 83 high.
September 15, the Japanese government and central bank foreign exchange market to sell yen in Tokyo to buy dollars, yen direct intervention, the yen exchange rate fell to 85 to 1 followed. But then again rose to 83 yen to 1, and continues today.
Can be said that the Japanese government and central bank measures to curb the appreciation of the yen effect is very limited. The reason, many analysts believe that, first, the Japanese government and central bank action to slow, missed the best time of intervention; Second, there is no co-operation in Europe and America, alone of limited intervention in the exchange rate; three major economies in Europe and America's prospects for recovery is still not optimism, the dollar exchange rate in the United States led the downward pressure there.
Market is expected to stimulate economic recovery, U.S. authorities may be added in early November and further more relaxed monetary policy, thereby increasing the pressure on appreciation of the yen. In view of this, combined with previous lesson, the Bank of Japan considers it necessary to rush in the United States action in advance of a new round of face to resolve the appreciation of the yen risk.
In addition to a zero interest rate policy announcement, the Bank of Japan 5, also announced that the price can be determined before the situation has stabilized and has zero interest rate policy, provided that no financial aspects of other risks and problems. In addition to specific research fund created to buy assets of matters in order to purchase government bonds, corporate bonds offer a fixed interest rate and other financial assets, the common way of guarantee funds, fund size is 35 trillion yen.
The news came out that the Tokyo stock market and foreign exchange markets caused by different levels of response.
Day, the Nikkei 225 stock average rose 137.7 points, after a lapse of 4 days to 9500 points or more upside once again. As of 17:00 the same day in Tokyo, the yen fell to 83.50 against the U.S. dollar compared with the level of 1 to 83.51 to 1, only the previous trading day down 0.27 yen. It can be seen more distant foreign exchange reaction.
Some market participants believe that only a continuation of the previous Bank of Japan's monetary easing policy, no major changes in direction, and thus limited the effect of additional policies. First step of action the Bank of Japan yen could defuse pressure, remains to be seen.
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