The Japanese yen rose against the U.S. dollar on
Thursday as the Bank of Japan kept its monetary policy unchanged and the
Federal Reserve slashed interest rates.
As of 09:31 GMT, the USD/JPY pair tumbled to a bottom
of 108.22, the lowest level since mid-October, after opening the session at 108.795,
set for its third straight daily decline.
The
BOJ decided on today to continue its ultra-flexible monetary policy as pressure
mounts on it to adopt further monetary easing steps.
Policymakers
agreed to keep interest rates at minus 0.10 percent, which was expected by
market analysts, while also pledged
to direct 10-year government bond yields by about 0%, after a 7-2 vote by the central
bank’s members.
There
could be further monetary policy easing if risks to economic activity increase
and inflation rises, the BOJ said.
The
BOJ “expects short- and long-term interest rates to remain at present or lower
levels as long as needed to pay close attention to the possibility that the
momentum toward achieving its price target will be lost."
On the other hand, the US dollar extended its slide against
a basket of major currencies, as the Fed opted to cut the interest rates for
the third time in a row to 1.75 percent.
Although the Fed hinted that it might temporarily halt
interest rate cuts in the coming period, market participants still believe
there could be another rate cut in December.
The dollar index slumped more than 0.36 percent to
97.08, while the EURUSD pair added 0.3 percent to hover around 1.1163.
Eyes will focus on
tomorrow’s U.S. non-farm payrolls, as it may weigh on the Fed’s monetary
decision in the upcoming period.