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Japanese Yen Climbs As BOJ Keeps Monetary Policy Unchanged


The Japanese yen strengthened against its major opponents in the Asian session on Tuesday, as the Bank of Japan held its monetary policy steady and indicated its willingness to pursue additional monetary easing measures if the economic downturn prevents it from achieving inflation goal.

As widely expected, The Policy Board of the BoJ, voted 7-2 to maintain interest rate at -0.1 percent on current accounts that financial institutions maintain at the bank.

The bank said it will purchase government bonds so that the yield of 10-year JGBs will remain at around zero percent.

Further, the bank will purchase JGBs in a flexible manner so that their outstanding amount will increase at an annual pace of about JPY 80 trillion.

The bank said it will not hesitate to take additional easing measures if there is a greater possibility that the momentum toward achieving the price stability target will be lost.

On the economic front, data from the Ministry of Internal Affairs and Communications showed that Japan's unemployment rate came in at a seasonally adjusted 2.3 percent in June.

That was beneath expectations for 2.4 percent, which would have been unchanged from the May reading

Data from the Ministry of Economy, Trade and Industry showed that Japan's industrial output fell a seasonally adjusted 3.6 percent on month in June. That missed forecasts for a decline of 1.8 percent following the 2.0 percent gain in May.

The yen was lower against its major opponents on Monday, excepting the pound. The currency fell 0.1 percent against the greenback, 0.3 percent against the euro and 0.4 percent against the franc for the day.

The yen was up by 0.4 percent at 108.56 against the greenback, from near a 3-week low of 108.95 seen at 8:00 pm ET. The pair was worth 108.78 when it closed deals on Monday. Further uptrend may take the yen to a resistance around the 106.00 level.

Having fallen to a 5-day low of 121.38 against the euro at 8:00 pm ET, the yen reversed direction and reached as high as 120.91. The pair had closed Monday's deals at 121.23. The yen is likely to face resistance around the 119.00 level.

The yen added 0.9 percent to hit a 7-month high of 131.61 against the pound. The pound-yen pair had ended yesterday's trading session at 132.87. Continuation of the yen's uptrend may see it challenging resistance around the 128.00 region.

The yen climbed to 109.45 against the Swiss franc, gaining 0.3 percent from a 5-day low of 109.83 it touched at 8:00 pm ET. At Monday's close, the pair was worth 109.71. The yen may possibly face resistance around the 107.00 level, if it appreciates again.

After falling to 82.75 against the loonie at 8:00 pm ET, the yen bounced off 0.4 percent to 82.42. The yen was trading at 82.63 per loonie at yesterday's close. Next immediate resistance for the yen is likely seen around the 80.5 region.

The Japanese yen was 0.4 percent higher at 71.96 against the kiwi, following a 4-day low of 72.23 recorded at 8:15 pm ET. At yesterday's trading close, the pair was worth 72.13. Should the yen rises further, 69.00 is possibly seen as its next resistance level.

The yen appreciated to a session's high of 74.90 against the aussie, marking a rise of 0.4 percent from a low of 75.19 set at 8:15 pm ET. The aussie-yen pair was worth 75.07 at Monday's New York session close. The yen is seen finding resistance around the 73.00 level.

Looking ahead, Swiss KOF leading indicator, Eurozone economic sentiment index and preliminary consumer inflation - all for July are scheduled for release in the European session.

German preliminary consumer inflation for July will be out at 8:00 am ET.

In the New York session, U.S. personal income and spending data for June, S&P/Case-Shiller home price index for May, pending home sales for June, consumer confidence index for July will be featured.

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