The Bank of Japan (BOJ) held rates steady Thursday, sending the yen sharply higher and sparking renewed speculation on whether policymakers would intervene to halt the currency's rise.
The two-day monetary policy review ended with the BOJ announcing that it will continue to put into place money market operations that would increase its monetary base at an annual pace of 80 trillion yen ($760 billion) while maintaining a negative interest rate of minus 0.1 percent to the policy-rate balances in current accounts held by financial institutions at the bank.
The yen still strengthened more than 1 percent against the dollar, hitting a 21-month high of 104.5, while Nikkei stock futures in Chicago and Osaka dropped more than 1 percent. The currency has rallied 13.5 percent year to date against the greenback, putting pressure on the export-focused companies listed on Japan's benchmark equity index.
Yellen Holds Rate Steady
Citing continued weakness in the job sector, the Federal Open Market Committee unanimously voted to hold the federal funds rate between 0.25% and 0.50%.
The two-day policy meeting ended with Fed Chair Yellen announcing the Fed intention to push back its plans to raise its benchmark short-term interest rate. The move was widely expected following a series of mixed US economic reports and the statement omitted any mention of global risks or risk assessment leading officials to believe that options for a rate hike as early as this summer are still a possibility.
In a statement, the central bank wrote that the labor market has slowed, at the same time as growth in economic activity appears have improved.