Japan has one of the most profitable currencies in the Forex market. However, because of the economic decisions of the Japanese Prime Minister. Traders and analysts were a little doubtful about the future of the Japanese currency. Now, the yen is rising due to the resignation of Japanese Prime Minister Shinzo Abe.
For traders and analysts of the Forex market, it is important to keep in mind the political changes and inflections. As the key to fundamental analysis is to focus on the changes that political decisions can cause in currency performance.
And in this case, the resignation of Japanese Prime Minister Shinzo Abe caused traders to increase their trading in the yen.
A review of the world situation and currencies
The resignation of the Japanese Prime Minister
The Yen strengthened significantly against the Dollar. This followed news that Abe, Japan’s longest serving prime minister, would resign due to his declining health.
Abe decided to leave behind a legacy of stability and centralized power. Power that propelled powerful economic stimulus policies, known as the „Abenomics“ project.
Abenomics is a comprehensive policy package to revive Japan’s economy from two decades of deflation, all while maintaining fiscal discipline.
It also improved relations with the United States during the Donald Trump administration, giving both powers free rein to develop more economic agreements.
Concerns about a possible change in Abe’s expansionary economic policy, Abenomics, fueled the move into the safe haven currency, said investors and analysts at Reuters.
„You see the strength of the yen in a little bit of uncertainty,“ said Lou Brien, a strategist with DRW Trading in Chicago. „Abenomics has been one of the most influential economic strategies.
Dollar Falls as Powell Awaits Fed
Japanese Yen quotation to date
At the time of writing, the Japanese yen is trading at $105.33 per dollar. Thus the dollar lost 1.1% against the yen for the last time.
Thus, the dollar returned to its decline against a basket of important currencies. This following statements by Federal Reserve Chairman Jerome Powell.
Powell said that the US central bank will seek to maintain inflation at 2%, on average. So periods of too low inflation are likely to be followed by an Crypto Comeback Pro effort to raise inflation above 2% for some time.
Will the yen be able to keep up with this streak when Japan’s new prime minister is elected?