Fundamental Comment

Japanese yen retreats after BOJ statement

Japanese yen retreats after BOJ statement

The Japanese yen fell during Thursday’s trading session after the Bank of Japan (BOJ) decided to keep interest rates unchanged, with an optimistic outlook on the economy.

As of 09:44 GMT, the Japanese yen fell against the U.S dollar by 0.04 percent at 109.56.

The Bank of Japan's monetary policy statement revealed that the short-term interest rate was set at -0.1 percent, moving in line with expectations, where the decision was voted by seven votes against two.

They also decided to keep the yield on Japanese government bonds for 10 years at zero, while holding the quantitative easing program at the same current pace of 80 trillion yen per annum.

The economy is likely to continue to expand at a moderate pace, as the slowdown in foreign economies on domestic demand expected to be limited although the economy is likely to continue to be affected by the slowdown for the time being, the BOJ statement said.

The Bank believes that the negative risks to foreign economies appear to remain significant and it is necessary to focus on the impact on businesses and households in Japan.

The Japanese central bank expects monetary policy to remain at the same or lower current levels as long as it is necessary to pay close attention to the possibility of a decline in momentum towards the price stabilization target.

The dollar index, which tracks the green currency’s movements versus a basket of major currencies, traded lower at 96.88.

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