Yen Falls As BOJ Keeps Policy Unchanged
January 22 2024 - 9:02PM
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The Japanese yen weakened against other major currencies in the
Asian session on Tuesday, after the Bank of Japan left its massive
monetary stimulus unchanged and downgraded its inflation outlook
for the next fiscal year.
The BoJ policy board, led by Governor Kazuo Ueda, unanimously
decided to maintain a negative interest rate of 0.1 percent on
current accounts that financial institutions maintain at the
central bank.
The bank will continue to purchase a necessary amount of
Japanese government bonds without setting an upper limit so that
10-year JGB yields will remain at around zero percent.
The bank also decided to regard the upper bound of 1.0 percent
for 10-year JGB yields as a reference in its market operations.
The Asian shares also traded higher, following the broadly
positive cues from global markets overnight and boosted by a sharp
rebound in Hong Kong stocks, with technology stocks leading the
charge.
Traders now look ahead to the release of some key U.S. economic
data as well as a slew of major central bank meetings later this
week, the European Central Bank, the Bank of Canada and the Norges
Bank.
Traders are likely to keep a close eye on a report on U.S.
personal income and spending, as it includes readings on inflation
said to be preferred by the U.S. Federal Reserve.
The safe-haven yen rose against the euro, the U.S. dollar and
the yen on Monday. Meanwhile, it held steady against the pound.
In the Asian trading now, the yen fell to 4-day lows of 161.71
against the euro and 188.93 against the pound, from yesterday's
closing quotes of 161.15 and 188.22, respectively. If the yen
extends its downtrend, it is likely to find support around 164.00
against the euro and 190.00 against the pound.
Against the U.S. dollar and the Swiss franc, the yen dropped to
4-day lows of 148.55 and 171.18 from Monday's closing of 148.09 and
170.37, respectively. The yen may test support near 151.00 against
the greenback and 172.00 against the franc.
Against Australia, the New Zealand and the Canadian dollars, the
yen edged down to 97.81, 90.43 and 110.23 from yesterday's closing
quotes of 97.30, 90.00 and 109.87, respectively. On the downside,
98.00 against the aussie, 91.00 against the kiwi and 111.00 against
the loonie are seen as the next support levels for the yen.
Looking ahead, U.K. public sector finance data for December is
due to be released at 2:00 am ET in the pre-European session.
In the New York session, Canada new housing price index for
December, U.S. Redbook report and U.S. Richmond Fed manufacturing
index for January are set to be published.
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