By: Barbara Zigah The Euro briefly struck a 10-month peak against the Japanese Yen in Asian trading today on raised expectations that the Bank of Japan will not consider an interest rate hike any time soon as the country and economy attempts to recover from the recent earthquake. The U.S. Dollar also struck a 3-week high against the Yen on speculation that the Federal Reserve may soon be reconsidering its ultra loose monetary policy. As reported at 3:36 p.m. (JST) in Tokyo, the Euro was trading against the Japanese Yen at 117.54 Yen, a price not seen in nearly 10 months; so far this year, the Euro has gained nearly 8% against the Yen. The U.S. Dollar, meanwhile, was trading at 76.25 Yen, a gain of 9% from the 76.25 Yen record low struck less than 2 weeks ago.
According to one analyst in Japan, interest rate differentials are driving the markets right now, especially as the Federal Reserve considers how to withdraw from the quantitative easing program which is scheduled to end in June. The ECB is certainly the front-runner among speculators as to which central bank is likely to first raise interest rates. But the Federal Reserve’s interest rate position is no longer as clear cut against a hike as it once was, and some market players are beginning to consider the possibility, remote as it may be.
http://www.dailyforex.com/forex-news/2011/03/Euro-Momentarily-Strikes-10-Month-High-Against-Yen/7587
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