The Bank of Japan – BOJ is concerned with the Yen’s recent stength. The recent push to the Yen came after the congress failed to approve the bailout plan on Thursday night. The USD/JPY plunged as low as 88, a 13 year low.
The intervention of the central bank will help the Japanese exporters enlarge their income, amidst a contracting economy. On the other side of the Pacific, the weakening American economy doesn’t help the USD/JPY pair.
The recent declaration by the NBER, that the American economy is in recession since December 2007 got another blow by the employment data, which shows that the recession will stay here throughout 2009.
Talks about an intervention by the BOJ already pushed the USD/JPY back above the 90 mark, to a close at 91.17. Apart from central banks, this major pair is eyed by many investors.
The coming week will be very interesting regarding this pair.