US Dollar, Japanese Yen Gain Ahead of Bank of Japan's Rate Decision

The U.S. dollar and the Japanese yen were two of the strongest major currencies on Monday, just behind New Zealand dollar as risk appetite restless weighed on the S & P 500 and Dow Jones. The moves suggest that Friday was not necessarily a turning point for the dollar after the release of better-than-expected U.S. non - farm payroll results provided a boon to both currency and U.S. values, but with event risk due to continue later in the week, we will not draw conclusions.

Although not quite move the market to the Japanese yen is worth noting that the BoJ will announce its latest rate decision overnight. The BOJ is expected to leave rates unchanged at 0.1 percent, and while some economic indicators - including machine orders, industrial production and manufacturing PMI - have shown signs of improvement, the central bank is likely to continue focusing on the risks arising from the persistent weakness of domestic demand and deflation.On 12 August, traders will be watching the release of the decision of the Federal Reserve rates. The Open Market Committee (FOMC) is widely expected that the range of federal funds at 0.0 percent - 0.25 percent, but the claim could cause instability burdensome when the FOMC announces an expansion of its efforts QE or eliminating them. Generally, signs that the central bank may increase purchases of Treasury have been negative for the U.S. dollar, but the evidence that the program is completed in the next month could send the dollar spiraling more. Although highly unlikely, any change to the previous wording that "economic conditions are likely to ensure exceptionally low levels of the federal funds rate for a prolonged period" is sure spark sharp volatility in financial markets