• Yen Gains on Potential Policy Change

The Japanese Yen gained across the board on Monday following reports the Bank of Japan was debating moves to unwind its huge monetary stimulus.

This was after the U.S. President Donald Trump criticized the dollar’s strength on Friday, saying the greenback is too strong and with the Federal Reserve positioned to raise interest rates two more times this year, current economic progress may be impacted, especially exports.

The comments plunged the U.S dollar against the Japanese Yen to 110.85, its lowest level since July 11. While the Yen rallied to almost two-week high against the Euro common currency to 130.70.

“The headlines about the Japanese central bank planning to tweak its policy stimulus is triggering this big yen move but unless we see some concrete steps, the yen’s strength may falter,” said Manuel Oliveri, a currency strategist at Credit Agricole in London.

Currency experts believed Trump’s comments in a way bolstered Yen outlook as investors were likely to have abandoned the greenback for the haven currency in order to limit risk exposure. Also, the failure of the G20 central banks to reach a viable consensus in Argentina regarding the ongoing trade war weighs on global economic outlook.

The Bank of Japan is scheduled to hold its next policy meeting on July 30 and 31.