According to experts of the Forex market, investors have shifted their attention to safe-haven assets in the environment that contributed to the growth of the Japanese yen, after the World Bank has cut its forecast for global economic growth.
USD/JPY fell by 0.3% to 102.03, while the EUR/JPY fell by 0.5% to 138.01, its lowest level in four months. The British pound also weakened by 0.2% against the yen to 171.30. The World Bank has lowered its forecast for global economic growth this year to 2.8% vs. 3.2% forecast in January.
In response to the news, emerging market currencies fell against the dollar, U.S. stock indexes fell, and the yield of U.S. Treasury bonds fell, while bond prices showing the opposite trend, rose. According to some Forex analysts, this dynamic has caused recent flows on the market.
Investors, the dollar bulls, are turning their attention to data on U.S. retail sales in May, which would be released on Thursday and would be the first major report of this week, which is expected to have an impact on the U.S. currency. Economists expect a recovery in sales compared to April.
During the Asian session, the yen rose to Y102.15
"The yen traded virtually has been unchanged on June 12, pending the outcome of the meeting of the Bank of Japan, which would be held tomorrow and on the basis of which the Head of the Central Bank Haruhiko Kuroda will hold its press conference" - told analysts of the Forex Broker Company TeleTrade. «According to the median forecast of economists, the Bank of Japan`s meeting ends without any surprises and changes. Central Bank is likely to leave unchanged the goal to expand the monetary base by 60 - 70 trillion yen (674 billion dollars) a year.
According to a recent study conducted by Reuters, investors still expect the Bank of Japan would expand its asset purchase program this year. However, judging by the comments and optimistic forecasts of the Head of Bank of Japan Kuroda on the background of recent upbeat economic reports, the likelihood that the Central Bank decides to similar measures on the next two meetings, tends to zero. Now, only 4 of 35 analysts expect the Bank of Japan would change its monetary policy or program incentives at a meeting in July - which is much less than in the previous month, according to analysts of Forex Broker Company TeleTrade.