The Japanese yen, along with the related exchange traded fund, is weakening, as the Bank of Japan tells investors that they shouldn’t bet on further strength.
The Japanese yen was trading around 102 per U.S. dollar Friday and recently traded near a three-month high against the greenback.
BOJ governor Haruhiko Kuroda said that investors shouldn’t expect the yen to rise further even as the currency hovers around its highest level in months, the Wall Street Journal reports. He pointed out that the BOJ is only “half way” toward achieving its intended goal, so the central bank’s loose monetary policies will still remain for the time being.
Kuroda argues that with the U.S. economy “recovering very strongly” and strengthening faster than the Japanese economy, the yen should not appreciate against the USD.
“In this kind of situation, I don’t think it’s reasonable to expect the yen to appreciate against the dollar,” Kuroda said in the WSJ article.
The BOJ governor is confident that the central bank will hit its 2% inflation target, countering speculation that the core consumer price index will dip below its key 1.0% threshold.