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Forex pairs in this Article » USD/JPY (London) - The Japanese yen has dipped to JPY104.7150 against the dollar after weakening above the JPY105 level for the first time in more than five years.

The USD/JPY pair has been driven by diverging monetary policy expectations with the Federal Reserve this month announcing a USD10bn tapering of its monthly asset purchase programme while the Bank of Japan remains firmly committed to aggressive monetary easing.

The dollar was given a boost in thin trading by US Labour Department statistics released yesterday announcing that initial claims for state unemployment benefits decreased 42,000 to a seasonally adjusted 338,000 last week.

The yen is heading for a ninth straight week of declines against the dollar. The BoJ is buying up JPY7 trillion of bonds each month in an effort to fight deflationary pressures, and has signalled that it is prepared to ramp up its purchases in pursuit of its 2 percent inflation target.

USD/JPY is currently at JPY104.7150, down 0.08 percent.
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