Japanese Yen: What Every Trader Needs to Know

What is the Japanese Yen?

The Yen (JPY), meaning “round object”, is the official currency of Japan. It was established by the Meji government in 1871 as part of the state’s modernization program. The idea was to shed Japan’s multi-currency regime that was maintained by feudal fiefs and instead mimic their European counterparts, implementing a uniform currency throughout the entire country.

History of the Bank of Japan: Monetary Policy Yen Deflation

The Bank of Japan (BOJ) is the country’s central bank. Established in 1882, it was given a monopoly on controlling the money supply as a way to prevent other parties from minting yen. Starting in the 1990s, Japan’s currency began to experience what BOJ Governor Haruhiko Kuroda described as a “chronic disease” of deflation.

The BOJ began to implement a series of policies designed to counter the deflationary spiral of the yen, and in 1999 pioneered what has been recently called “forward guidance”. This was a commitment to achieving a “stably zero percent or an increase” in consumer price inflation (CPI). Despite achieving positive CPI data in 2006, the housing crisis in 2008 sent yen price growth back into negative territory,

Article source: https://www.dailyfx.com/forex/fundamental/article/special_report/2018/11/25/Japanese-Yen-What-Every-Trader-Needs-to-Know.html