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Japanese Yen Firms As BoJ Holds Monetary Policy Steady

japaneseyen sept19 lt

The Japanese yen firmed against its key counterparts in the Asian session on Thursday, after the Bank of Japan maintained its monetary policy, but reiterated its willingness to pursue additional easing measures to support the economy.

The BoJ maintained 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 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 reexamine economic and price developments at the next monetary policy meeting in October. The bank repeated that it will not hesitate to take additional easing measures if needed.

Asian stocks were mixed after the U.S. Federal Reserve decided to cut interest rates for the second time this year, but offered mixed signals about the outlook for interest rates. The Fed reiterated that the labor market remained strong and economic activity was growing at a moderate rate, but uncertainties arising from global developments create risks to the economic outlook.

The currency showed mixed trading against its major opponents on Wednesday. The yen was steady against the euro, the pound, and the franc but weaker against the greenback.

The yen appreciated to a 3-day high of 107.79 against the greenback, up by 0.6 percent from a low of 108.47 seen at 8:00 pm ET. The pair was worth 108.45 when it closed deals on Wednesday. The yen is seen finding resistance around the 104.00 mark.

The yen was 0.6 percent higher at a 2-day high of 118.96 against the euro, following a decline to 119.66 at 5:15 pm ET. The pair had finished Wednesday's deals at 119.61. The yen is likely to face resistance around the 114.00 region, if it gains again.

Having declined to 135.34 against the pound at 5:00 pm ET, the yen reversed direction, rising 0.7 percent to a 2-day high of 134.41 following the decision. The pound-yen pair had ended yesterday's trading session at 135.23. Should the yen strengthens further, it may test resistance around the 131.00 region.

The yen was up by 0.6 percent at a 9-day high of 108.16 against the franc, after falling to 108.81 at 6:00 pm ET. At Wednesday's close, the pair was valued at 108.73. Next immediate resistance for the yen is likely seen around the 106.00 level.

The yen added 0.6 percent to hit a 10-day high of 81.10 against the loonie, reversing from a low of 81.62 it recorded at 5:30 pm ET. The yen was trading at 81.61 per loonie at yesterday's close. Further uptrend may take the yen to a resistance around the 78.5 area.

Following a fall to 68.64 at 6:45 pm ET, the yen bounced off to hit a 2-week high of 68.01 against the kiwi. At yesterday's trading close, the pair was quoted at 68.49. Continuation of the yen's uptrend may lead it to a resistance around the 66.00 region.

Data from Statistics New Zealand showed that New Zealand's gross domestic product expanded a seasonally adjusted 0.5 percent on quarter in the second quarter of 2019.That exceeded expectations for an increase of 0.5 percent although it slowed from 0.6 percent in the first quarter.

The yen spiked higher to a 10-day high of 73.12 against the aussie, marking a 1.3 percent rise from a low of 74.06 seen at 5:15 pm ET. The aussie-yen pair was worth 74.05 at Wednesday's close. The yen is poised to challenge resistance around the 71.00 mark.

In today's events, the Swiss National Bank's interest rate decision is due at 3:30 am ET. Economists expect the policy rate to remain unchanged at 0.75 percent.

Eurozone current account data for July and U.K. retail sales for August are scheduled for release in the European session.

At 7:00 am ET, the Bank of England announces its interest rate decision. The central bank is widely expected to hold the interest rate at 0.75 percent and asset purchases at GBP 435 billion.

The U.S. weekly jobless claims for the week ended September 14 and existing home sales for August will be featured in the New York session.

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