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Forex: USD/JPY spikes to 89.50; Beware of thin liquidity

By FXstreet.com,  January 13, 2013, 05:31:00 PM EDT

FXstreet.com (Barcelona) - USD/JPY has just made a fresh new high at 89.53, as momentum traders continue to be fed by Japanese weekend press releases, strengthening the case for bold monetary action by the new Japanese government. Add the extra thin liquidity conditions on today's Japanese holidays, and we may be in for some wild rides.

According to Kyodo News: "The government of Prime Minister Shinzo Abe and the Bank of Japan will state an inflation target of 2 percent in their planned joint statement to clarify their commitment to beating deflation that has haunted the world's third-largest economy, sources close to the matter said Sunday."

Meanwhile, Japan Times cites Mr. Abe on an NHK interview over the the weekend: "What will be important is properly including the price goal of 2 percent..."

Bloomberg also reports that Japan's Abe is determined to seek a 'Bold Leader' at the BoJ.

From Bloomberg: "We want someone who can push through bold monetary policy," Abe said. "We are thinking hard about fiscal discipline as we form the next fiscal year's budget. Still, the economy isn't going to change unless we display a firm commitment to escape deflation at the same time."




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, Forex and Currencies

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