USD/JPY trading at historic highs
USD/JPY has been trading at historic highs due to the difference in interest rates in the two countries. In the US they are above 5.0% whereas in Japan they remain at around 0.0%.
The difference is significant as it favors the USD over the JPY since investors can reap higher interest simply by parking their money in the US.
The effect of the divergence was highlighted by Japanese Current Account data out on Monday, which showed a lower-than-expected level of net inflows into Japan in February. A surplus of over 3 billion JPY had been expected when actually the figure came out at 2.6 billion JPY.
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