The yen continued to trade weak on Monday with the US dollar strengthening by 0.11% to 108.03 against the yen.
Analysts think this week there has not been much change for the yen other than recording small losses after strengthening to a 3 -week high. The yen has registered a 2.6% strengthening against the US dollar in April.
The next day the Central Bank of Japan (BoJ) will hold a meeting with policymakers. Analysts expect the BoJ will not make any changes in the policies it applies. At the last meeting, the BoJ clarified that the policy implemented allows 10 -year government bonds to be traded at 25 basis points. The bank also reduced the frequency of its bond purchases.
It should be noted for market players that the central bank is now more optimistic about the state of the Japanese economy. In January, the BoJ revised its growth forecast, from 3.6% to 3.9% for fiscal year 2021.
Japanese Retail Sales for March are among the indications that support the statement. Indications of consumer spending recorded an increase of 4.6%. Retail sales have declined in the previous three readings, as covid-19 infection rates remain high and vaccine distribution is very slow. A strong increase in retail sales will drive up consumer spending and demand for the Japanese yen.
The US dollar index, which measures the greenback against other currencies, was strong by 0.09% at the 90.918 exchange rate as of 09.20 p.m.
