Yen Sustains Gain for a Second Day

• Yen Sustains Gain for a Second Day

The decision of the Bank of Japan to reduce its long-dated bond-buying program on Wednesday bolstered the Yen outlook across the board. Pushing the currency to a six-week high against all G-10 currencies On Thursday.

Experts believed the cut back was a sign of positive economic outlook in 2018 and expect the apex bank to tighten monetary policy by the middle of the year.

Allen Sinai, the president of Decision Economics Inc., said he expects the Japanese economy to expand at 2 percent in 2018 and 2.5 percent in 2019 due to strong economic fundamentals.

“The markets and I are sensing, because of the fundamentals of the Japanese economy, an upside surprise potentially on growth and on inflation, and therefore a surprise out of the BOJ,” he said in an interview in Tokyo on Wednesday, where he was meeting with policymakers.

While BOJ governor, Haruhiko Kuroda, has said the apex bank won’t raise interest rates just because the economy is doing well, as inflation is its ultimate target, markets believe improved global demands and strong economic outlook in 2018 could force the bank to commence balance sheet normalization.

The Yen gained 0.10 percent against the U.S. dollar during the Asia trading session to 111.55, however, the increased in Yen attractiveness is expected to further push the pair towards 109.16 support levels as the U.S. dollar remained unattractive presently.