After declining in value against the Japanese yen, the United States dollar has seen its value surge as investors await news from the Federal Reserve. The United States’ currency has suffered a series of value losses fuelled by Japanese economic strategy, which has been dubbed ‘Abenomics’ after the country’s Prime Minister, Shinzo Abe.
The dollar has increased in value against several foreign currencies, many of which were previously gaining on it after a series of losses. The biggest changes have been against the yen, with other major currencies such as the euro maintaining a value of $1.33 – the same as the currency’s previous value at the end of trading last Friday.
Japan’s currency has fluctuated in value strongly over the past six months, with the value of the yen dropping substantially from December until recently. The Japanese currency was previously valued at 78 yen per dollar at the end of 2012 – a value that put serious strain on Japan’s ailing exporters.
The dollar currently commands a value of 94.86 yen – a figure that, despite being a far cry from 101 yen highs several weeks ago – has been heralded as improving the outlook of Japan’s major exporters. Numerous Japanese businesses, particularly the country’s large consumer electronics industry, faced low profits due to the yen.
The increase in the value of the dollar can be attributed to announcements from the Federal Reserve, which are due to take place shortly. Many investors are concerned that the Federal Reserve’s stimulus plans, which have dominated American financial policy for several years, may be scaled back to near-minimal levels.
Fiscal policies such as quantitative easing have had a major impact on the value of the US dollar over the past five years, with many economists blaming the Federal Reserve’s policies for inflation and other currency issues. Wall Street, and many of the United States’ biggest trade partners, are awaiting the Fed’s announcements.
