Yen strengthens on safe haven demand

The Federal Reserve and Bank of Japan are scheduled to hold policy meetings next week.“The yen’s fall to fresh lows prompted some profit-taking,” Joe Manimbo, a market analyst in Washington at Western Union Business solutions, a unit of Western Union Co., said in a phone interview. “The yen’s rebound partially stems from caution in the runup to the Fed next week.”

The yen rose from a five-year low versus the dollar amid speculation on the timing of a cut in the Federal Reserve’s $85 billion of monthly bond purchases.The Japanese currency fell earlier as the yield difference between Treasuries and Japanese bonds traded at almost the widest since April 2011. The euro weakened as European Central Bank policy maker Peter Praet said the region’s recovery is “fragile.” 

Rate Range Projection by Bank

 Next  week           102.00  -  104.00

Next 3 months         98.00 -  105.00

The market is concerned about FOMC this week but likely contine the current strong US$ trande against JPY for a while.