Yen is set to plummet against the Dollar, Euro heads for gains

Modified: Friday, 19 October 2012 10:12 BST - Written by Frank Davies

STORY LINK Yen is set to plummet against the Dollar, Euro heads for gains

The Japanese Yen is set to make its biggest decline against the US Dollar since August due to increasing speculation that the Bank of Japan will boost stimulus in an effort to get the nation’s economy back on course.

Such a move will almost certainly lead to a reduction in demand for the nations assets as a safe-haven. Bank of Japan policy makers are set to meet on October 30th and will release their latest and updated economic projections for the 2012 and 2013 fiscal years, as-well-as forecasts for 2014.

Currently the US Dollar is trading in the region of 79.3100 but will almost certainly strengthen if the BoJ goes ahead with its stimulus plans.

The Euro is heading for weekly gains against most of its major counterparts as European leaders meet in Brussels for a second day as they attempt to tackle the regions debt crisis. Some progress has been made towards creating a banking supervisor for the single currency but as expected very little has been mentioned about resolving the issues of debt ridden Greece and Spain.

The Euro is set to make further gains as confidence grows that a resolution to the debt crisis is in sight. This opinion was backed by the record breaking retail bond sale in Rome. Italy said it will reduce the amount of debt it issues in the rest of the year after selling 18 billion Euros of four-year BTP Italia bonds, the most ever raised in a single debt offering on European markets.

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