Mario Draghi has something new to worry about as he prepares for
tomorrow’s European Central Bank policy meeting: the euro-yen exchange
rate.
The yen approached a six-year low versus the shared European currency
after Bank of Japan Governor Haruhiko Kuroda surprised investors late
last week by adding to a record stimulus program. Kuroda’s actions
jeopardize the weaker euro that analysts say Draghi needs to reflate the
economy, heaping pressure on him to come up with a policy response.
“Kuroda has thrown down the gauntlet to Draghi,” Robert Rennie, the
head of currency and commodity strategy at Westpac Banking Corp., said
yesterday by phone from Sydney. “Whether Draghi will, or can, accept the
challenge remains to be seen.”
Wednesday, November 05, 2014
EUR/JPY Surges to above 142.50
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