US Dollar is Reinforcing
The Japanese yen remains the strongest major currency after news that the Bank of Japan has reduced the volume of bond purchases. The US dollar remains the second strongest currency. At the same time, the European major currencies are under strong pressure from the market. The euro is declining, despite strong economic data from the Eurozone and Germany.
The unemployment rate in the euro area fell to 8.7% in November, compared to 8.8% in October. This is also the lowest level for 9 years since 2009. Industrial production in Germany increased by 3.4% in November. Germany's trade balance in November increased to 22.3 billion euros. The unemployment rate in Switzerland fell to 3.0% in December, and foreign exchange reserves rose to 744 billion Swiss francs.
Analysts suggest that the Bank of Japan will probably have to consider the possibility to increase the target benchmark yield and reduce the rate of buying risky assets in 2018, to be consistent with other developed countries, that have begun to tighten policy.