BBH on the possibilities of the yen and the intentions of the Bank of Japan

Tomorrow open Japanese markets. To this day, yen largely traded in the Friday bands. Today, however, beginning to use the yen higher demand. Some analysts link the restoration of the Japanese currency risk arising from the results of stress tests of American companies and information on the amounts that may require some banks, as well as meetings of the ECB and the Bank of England, which will be held tomorrow. Yet the role of the yen as the currency of refuge, it seems somewhat diminished. On Tuesday, a pair of Euro / yen has not been able to overcome the mark Y100, euro / yen vydohlas approach to Y133, while the pound / yen - the vicinity of Y150. According to press reports, the Bank of Japan was faced with a higher risk of attempting to stabilize its financial system through the acquisition of financial assets such as commercial, securities and corporate bonds. Bank of Japan has asked the Ministry of Finance to keep a larger portion of annual profits. Typically, the Bank of Japan leaves in the form of compulsory reserve for only 5% of annual surpluses, and the remaining places at the disposal of the government. Now the Bank of Japan wants to retain 15% profit, which in 2008 amounted to 200 billion yen, and if he receives the consent of the Ministry of Finance, as expected, the legal reserve bank to increase by 45 billion yen.