On Wednesday, the U.S, dollar (USD) traded lower against most major currencies for the 3rd day in a row.
This decline came after Gov. Haruhiko Kuroda, the President of the Bank of Japan (BoJ) told a group of legislators in Japan that the Japanese yen (JPY) is not likely to decline any further.
As a result, a wide ranging selloff in the greenback was prompted.
In recent months, policy makers in Japan have been aware of the declining yen and in April this year, an economic advisor to Shinzo Abe, the Prime Minister of Japan, valued the yen at 105 JPY to the USD.
In February this year, Kuroda also announced that the central bank would not likely expand the stimulus program in Japan as a result of a weaker JPY. In February this year, Kuroda said the central bank was not likely to increase the stimulus program in Japan as a result of the weak yen.
On Friday, the Japanese yen declined to a 13 year low. This decline came as a result of a strong jobs report for May out of the U.S.
Despite comments from the BoJ, many currency strategists believe that in the long term, the USD will continue to strengthen against the yen.
According to Boris Schlossberg, managing director of FX strategy at BK Asset Management, even if the Federal Reserve increases interest rates, nothing will stop the greenback from gaining on the yen.
In New York, in late trading on Tuesday, the selloff of the USD peaked and as a result, the ICE dollar index (DXY, +0.20%) fell to a session low of 94.3.
MT4 Chart: USD/JPY
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