The Japanese Yen traded higher against the Pound and the US Dollar after the Bank of Japan said that it will continue with its unprecedented monetary easing programme and reconfirmed its expectations that inflation in the country will reach its 2% target by April 2015.
The BOJ’s board led by Governor Haruhiko Horuda vowed to continue its monetary base by as much as 60 to 70 trillion Yen a year. The Central Bank is expected to increase its easing programme between April and June next year in a bid to keep the economy supported when a new sales tax is introduced. The economy is forecast to contract in the three months after the sales tax is raised in April before returning to growth.
Adding to the Japanese Yen’s strength was the release of solid data which supported the idea that the nations Prime Minister Shinzo Abe’s economic plan known as Abenomics is working in its attempt to get the country’s economy moving.
According to the Ministry of Land, Infrastructure, Transport and Tourism, the annual increase in the number of housing starts more than doubled to 19.4% in September, far higher than the 8.8% recorded in August and smashing economist forecasts for a 12.1% rise. Construction orders also smashed forecasts. The amount of orders received by the country’s top 50 major contractors saw a huge jump of 89.8% in September compared to the 21.4% expansion in August.
The US Dollar slipped against the Yen after the Federal Reserve policy statement was less pessimistic over the health of the world’s largest economy than had been expected. The Central Bank chose to maintain its monetary easing programme but did not give any clues as to when it may begin to taper it.
The lack of direction caused investors to fret that a cut could occur earlier than they predicted. Investors will now be looking ahead to the U.S. nonfarm payrolls report for October, due for release next Friday, to help assess the timing for a possible reduction in Fed stimulus.
Current Japanese Yen (JPY) Exchange Rates:
The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 98.2524
The Pound Sterling/Japanese Yen Exchange Rate is currently in the region of: 157.4489
The Euro/Japanese Yen Exchange Rate is currently in the region of: 134.6350
The New Zealand Dollar/Japanese Yen Exchange Rate is currently in the region of: 81.3261
The Australian Dollar/Japanese Yen Exchange Rate is currently in the region of: 93.4380
(Correct as of 10:00 am GMT)