With the Pound already boosted by yesterday’s dovish-yet-encouraging Bank of England meeting minutes, the GBP/JPY pairing was able to soar overnight as the Bank of Japan delivered its rate decision and policy statement.
In its attempts to bring an end to deflation the BOJ opted to leave policy unchanged, although over half of economists surveyed expect the central bank to increase stimulus in the second quarter of 2014.
Given that the Federal Reserve hinted at the possibility of tapering easing in the next few months in the FOMC minutes the BOJ’s stance seemed particularly dovish.
According to currency strategist Jim Vrondas; ‘The market is expecting further action from the BOJ at some point and the general expectation is for the Yen to continue to weaken.’
Consequently the Yen slipped against its rivals, shedding 0.8 per cent against the US Dollar and 0.5 per cent against the Euro.
The GBP/JPY exchange rate hit a low of 160.6680
However, Haruhiko Kuroda, Governor of the Bank of Japan, did deliver a relatively upbeat assessment of global economic conditions. He stated; ‘The outlook is brightening somewhat due to a recovery in the United States and Europe. We have slightly upgraded our view of overseas economies. We were worried about the US fiscal standoff, but the impact has been very limited. We expect the US economy to pick up pace as downside pressure from that fiscal situation eases.’
As the European session got underway a mixed bag of PMI reports for the Eurozone helped the Yen recover ground against the Euro, but losses against the Pound were compounded as a report showed that the UK budget deficit narrowed in October.
Tomorrow’s Japanese small business confidence figures and the BOJ’s monthly economic report could trigger additional Yen movement before the weekend.
Current Japanese Yen (JPY) Exchange Rates:
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The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 100.8000 >
The Pound Sterling/Japanese Yen Exchange Rate is currently in the region of: 162.1510 >
The Euro/Japanese Yen Exchange Rate is currently in the region of: 135.5490 >
The New Zealand Dollar/Japanese Yen Exchange Rate is currently in the region of: 82.8647 >
The Australian Dollar/Japanese Yen Exchange Rate is currently in the region of: 93.5444 >
(Correct as of 10:30 GMT)