Yen Dives On Report Japan Set To Unveil Huge Stimulus

TOKYO, (UrduPoint / Pakistan Point News - 27th july,2016) - The Yen fell sharply Wednesday in response to a report that Japan's government will unveil a massive 27 trillion yen stimulus package to boost the stumbling economy. The Dollar jumped as high as 106.54 yen from around 105.01 yen in the morning and 104.64 yen in New York, after Fuji Television said Prime Minister Shinzo Abe will announce details of the package Wednesday afternoon. The euro jumped to 117.15 yen, from below 115 yen in US trading. Abe promised a stimulus -- which reports have varied at being worth 10 to 30 trillion yen -- after Britain's vote last month to quit the European Union sparked a rally in the yen that threatened profits at Japan Inc. Traders tend to buy Japan's Currency as a safe bet in times of turmoil or uncertainty, but it makes the country's exporters less competitive overseas.

Wednesday's report comes as speculation mounts that the Bank of Japan will further ease monetary policy after a two-day meeting Friday. The government and central bank have come under increasing pressure to do more as a string of weak readings and sagging business confidence highlight a long-running weakness Japan's economy. BoJ governor Haruhiko Kuroda is widely expected to announce a fresh stimulus on Friday. "Market pricing has never been so certain of more easing, so if the BoJ doesn't act, it'll be a really big disappointment," Daisaku Ueno, the chief currency strategist at Mitsubishi UFJ Morgan Stanley Securities, told Bloomberg news.