The Japanese Yen was broadly lower as the Bank of Japan (BOJ) maintained existing monetary policy which calls for continued easing as necessary in order to devalue the Yen if it proves to be appreciating to the detriment of the Japanese economy. The BOJ’s assessment of Japan’s economic outlook continues to also be upbeat, indicating that in the short term no additional easing is likely. The BOJ did decide to extend three soon-to-be expired special loan facilities which resulted in a buy back of the USD/JPY pair.
As reported at 12:35 p.m. (JST) in Tokyo, the USD/JPY pair edged 0.6% higher to 102.58 Yen which followed a hard fall to 101.76 Yen in the moments after the BOJ made their policy announcement. The EUR/JPY gained 0.7% to trade at 140.69 Yen. The U.S. Dollar Index, which measures the greenback against its major rivals, recovered some ground at traded at 80.156 .DXY, moving away from the low of 79.951 .DXY.
BOJ Press Conference Should Offer Clues
The Bank of Japan’s governor will be holding a press conference shortly and markets will await any hints of further easing. Some disappointing economic news, especially that GDP grew more slowly than expected in the 4th quarter, suggest to some that there is diminished momentum in the economy just as the sales tax increase is about to come into effect.