The yen that rose immediately after the Bank of Japan's decision to take additional easing steps pulled back shortly.
The Bank of Japan increased the total size of its asset purchase program by JPY 5 trillion to JPY 70 trillion with some changes in its composition. The size of the total program for end-2012 will remain at JPY 65 trillion. But the bank has decided to expand the program by JPY 5 trillion by end-2013.
The central bank announced an additional JPY 10 trillion in asset purchase alone, while keeping the benchmark interest rate unchanged at 0-0.1 percent.
The central bank also decided to raise the asset purchases by JPY 10 trillion to JPY 40 trillion by end-2013 from JPY 30 trillion announced earlier. Asset purchase target for the end-2012 is now JPY 35 trillion.
After hitting a 10-day high of 80.50 against the US dollar at 11:45 pm ET, the yen declined. As of now, the yen is trading at a 2-day low of 81.46 per dollar with 81.8 seen as the next downside target level.
The yen that rose to a 4-day high of 130.27 against the pound and 9-day highs of 106.30 against the euro and 88.48 against the franc at 11:45 pm ET fell thereafter. At present, the yen is worth 107.50 per euro, 89.40 against the franc and 131.80 against the pound. If the yen weakens further, it may likely target 108.0 against the euro, 90.0 against the franc and 133.0 against the pound.
Against the Canadian dollar and New Zealand dollar, the yen is currently worth 82.60 and 66.20, compared to a 3-day high of 81.71 and more than a 7-week high of 65.51, hit respectively at 11:45 pm ET. The next downside target level for the Japanese currency is seen at 83.0 against the loonie and 66.5 against the kiwi.
The yen that climbed to a 3-day high of 83.56 against the Australian dollar at 11:45 pm ET pulled back thereafter and is now trading at a 4-day low of 84.55. If the yen falls further, 85.0 is seen as the next target level.
Looking ahead, Japan's housing starts data for March is due at 1 am ET.
German GfK consumer confidence index for May and import price index for March, French PPI for March and the Swiss KOF leading indicator for April are slated for release in the European session.
The U.S. advance estimate of first quarter GDP, employment cost index for the first quarter and the Reuter and the University of Michigan's final report on the consumer sentiment index for April are expected in the New York morning session.
by RTT Staff Writer
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