Euro’s Loss Being Yen’s Gain May Be Headache for BOJ: Analysis

The Bank of Japan will largely be a bystander this week while the market focuses on the European Central Bank meeting, congressional testimony by U.S. Federal Reserve Chair Janet Yellen and the U.S. jobs report. But further aggressive easing by the ECB may have an undesired effect on the Japanese yen’s trade weighted index (TWI), Bloomberg strategists Richard Jones and Vassilis Karamanis write.

The Japanese currency has been appreciating on a trade weighted basis in large part due to the euro’s weakness against the yen, having lost 12.5 percent from its high last December and 7.1 percent from the 2015 high in June.