Japan will expel more funds than what the markets expect in order to finance its reconstruction and recovery efforts caused by the devastating earthquake and tsunami. That is what the co-chief investment officer of the top bond fund organization, PIMCO, stated. A significant exile of Japanese foreign investments would likely reinforce the yen despite attempts by the Bank of Japan to limit the currency’s rise as an attempt to protect the country’s exports.
The Japanese economy is currently at a very crucial stage, people are very cautious and want to avoid taking any chances especially since Japan’s debt burden is currently at 200% of its Gross Domestic Product index. Currencies such as the EURJPY and USDJPY are recording continuously new highs making gains over the Euro. It is of high importance to see how low the Japanese government can keep their currency. The EURJPY is currently traded at 117.96.