FOREXYARD: Forex News Blog

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Yen Weakens on BOJ Liquidity Provision Posted: 14 Mar 2011 12:00 AM PDT The Japanese yen came off its yearly high following a massive injection of 7 trillion yen into the Japanese financial system to help ease the burden on financial institutions and facilitate payment settlements. The Bank of Japan (BOJ) also suggested it may take further steps to loosen monetary policy in light of the stress on the financial system from the earthquake and tsunami. The decision by the BOJ to assist the financial system comes after an earthquake and tsunami has caused the worst crisis the country has faced since WWII. Following the injection of cash by the BOJ, the USD/JPY came off of its low of 80.63 and rose to a high of 82.40. Highlighting the stress in the financial markets, the Nikkei 225 is currently down 6.2%. Today's market events: JPY – Monetary Policy Statement – Tentative The BOJ may take unorthodox measures to loosen monetary policy in light of the grave national crisis. Any new policy measures would be a negative for the yen. Support for the USD/JPY is found at 81.55, followed by 81.10, and this morning's low of 80.60. Resistance is the overnight high of 82.40 and Friday's high at 83.30. EUR – Industrial Production m/m – 10:00 GMT Expectations: 0.4%. Previous: 0.3%. A positive reading will be a catalyst for the euro versus the dollar and help to strengthen the EUR/USD bullish trend. Traders should initially be targeting the overnight high at 1.3980 followed by this year's high at 1.4035.

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