Recent comments made in Japan by one of the Prime Minister’s economic advisors have pushed the Japanese Yen to a 2-year peak versus the common currency Euro as FX traders consider the likelihood that the Yen’s value has deteriorated beyond the Japanese government’s intentions. According to Koichi Hamada, the Yen might be on the verge of retracing some losses, especially against the US Dollar, as the USD/JPY would be more appropriate at around 105 rather than the current 120. On Monday, the Bank of Japan hinted that its easing efforts were working on a broader scale, suggesting that additional near term stimulus was unlikely.

As reported at 8:54 am (GMT) in London, the USD/JPY was trading at 119.70 Yen, a loss of 0.3% while the EUR/JPY was about 0.5% lower at 126.30 Yen, moving away from the session’s 2-year trough when the pair priced out at 126.08 Yen.

Abenomics Working Too Well?

According to a currency strategist in Tokyo, the advisor’s comments suggest that Prime Minister Shinzo Abe may be growing uncomfortable with the Yen’s rapid depreciation, much of that a factor of the so-called Abenomics policy instituted by the Prime Minister. Nonetheless, analysts still expect the Yen to strengthen against the Euro, given all of the economic and geopolitical uncertainties in the Eurozone.