Yen Steady After Bank Of Japans Unchanged Monetary Policy Stance The yen was little affected by the Bank of Japans widely expected monetary policy outcome on Thursday in Asia, although it showed some initial penchant towards a bearish drive. At the end of a two-day meeting of Bank of Japans nine-member Policy Board, led by Governor Haruhiko Kuroda, the central bank said it will keep the target of the monetary base expansion at an annual pace of JPY 60-70 trillion. The Board said that the economy has been recovering moderately and the year-on-year change in the core consumer price index is now in the range of 0.5-1 percent. The central bank expects the economy to continue moderate recovery going forward while the annual rate of change in CPI is seen rising gradually. Japans Nikkei index was the sole outperforming stock market today in the Asia-pacific region, largely due to a dollar recovery against the yen. Other markets are trading notably lower amid renewed worries that the U.S. Federal Reserve will begin scaling back its asset buying program sometime in the near future. A weak report on Chinese manufacturing activity is also hurting sentiment to a notable extent. An index measuring manufacturing activity in China came in with a score of 50.4 in November, flash survey results from HSBC and Markit Economics revealed today, touching a two-month low. The headline figure was well shy of forecasts for 50.8 and down from 50.9 in October. The minutes of the Feds October monetary policy meeting noted that the central bank could decide to slow the pace of its asset purchases at one of its next few meetings. The minutes showed that the Fed members generally expect incoming economic data to be consistent with their outlook and thus warrant trimming the pace of purchases in coming months. Elsewhere, the International Monetary Fund urged the Reserve Bank of Australia to keep its monetary policy accommodative as an overvalued exchange rate continued to weigh on the non-mining sector. The yen hovered around its early Asian sessions 10-week low of 100.51 against the US dollar, with the USD/JPY pair having appreciated almost 1.5 percent from its symmetrical triangle break-out point near 99.0 last week. Further downside pressure could lead the yen testing the 101.0 support in the near-term. The yen slipped to a 3-day low of 96.09 against the Canadian dollar, just a tad below Mondays 8-week low of 96.18. A doji formation yesterday supported further yen bear-run, with a major support being visible on the trend-line resistance of a horizontal channel in the CAD/JPY pair at 98.0. The Japanese currency challenged yesterdays multi-day low against the pound, trading as low as 161.70. The yen also erased its overnight gains against the Swiss franc and the euro, falling as much as 109.53 and 134.95, respectively. Both the euro and the Swiss franc moved heavily down overnight on market speculation that the European Central Bank would adopt negative interest rates soon. The yen moved mostly sideways against the currencies of Australia and New Zealand on Thursday morning in Asia. The yen stuck in ranges between 93.28-57 against the Australian dollar and 82.69-94 against the New Zealand dollar after the BoJ policy.
Posted on: Thu, 21 Nov 2013 06:31:11 +0000
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