Yen Extends advance Tuesday, September 12, 2006
The yen continues to rally on Tuesday on speculation that the Bank of Japan may signal rate hike possibility after the policy meeting ended on September 8.
The stronger-than-expected Japan capital spending data released on Monday raised the expectations for a second rate hike within this year. The BoJ will assess whether the economy can withstand higher interest rates during the meeting this week. It is widely expected that the BOJ will leave its overnight lending costs unchanged at 0.25%. The market will focus on the BoJ governor Fukui~{!/~}s speech after the meeting.
The net yen short positions rose to a record high last week. As traders unwinded yen short positions on speculation that Fukui may not be so dovish, the yen rose across the board before the BoJ meeting. The yen rose to a two-week high at against the dollar and the euro.
The stronger-than-expected Japan capital spending data released on Monday raised the expectations for a second rate hike within this year. The BoJ will assess whether the economy can withstand higher interest rates during the meeting this week. It is widely expected that the BOJ will leave its overnight lending costs unchanged at 0.25%. The market will focus on the BoJ governor Fukui~{!/~}s speech after the meeting.
The net yen short positions rose to a record high last week. As traders unwinded yen short positions on speculation that Fukui may not be so dovish, the yen rose across the board before the BoJ meeting. The yen rose to a two-week high at against the dollar and the euro.
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