Yen Retreats After BoJ Maintains Monetary Stimulus
31 Octobre 2017 - 02:43AM
RTTF2
The Japanese yen gave up its early gains against its major
counterparts in the Asian session on Tuesday, after the Bank of
Japan left its policy rate and yield target for 10-year government
bonds unchanged, while maintaining a cautious stance on
inflationary outlook.
The decision was widely expected by economists.
Governor Haruhiko Kuroda and his board members decided by an 8-1
majority vote to hold its target of raising the amount of
outstanding JGB holdings at an annual pace of about JPY 80
trillion.
The bank will purchase government bonds so that the yield of
10-year JGBs will remain at around zero percent.
The board also decided to maintain the -0.1 percent interest
rate on current accounts that financial institutions maintain at
the bank.
With regard to outlook, Japan's economy is likely to continue
its moderate expansion.
Data from the Ministry of Internal Affairs and Communications
showed that Japan's unemployment rate held steady for the third
straight month in September, in line with expectations.
The jobless rate came in at 2.8 percent in September, the same
rate as in August.
The currency's decline was limited to rising risk aversion,
after disappointing official PMI from China.
The manufacturing Purchasing Managers' Index fell to a 3-month
low of 51.6 in October from 52.4 in September, according to a data
by the National Bureau of Statistics.
The yen showed mixed performance on Monday. While it rose
against the greenback and the euro, it held steady against the
franc. Against the pound, it dropped.
The yen dropped to 149.57 against the pound, after having
advanced to 149.19 at 10:30 pm ET. The next possible support for
the yen is seen around the 150.5 region.
Survey data from GfK showed that UK consumer confidence weakened
in October on concerns about wider economic prospects but
willingness to buy improved for the third straight month.
The consumer sentiment index fell by one point to -10 in
October.
The yen reversed from an early 11-day high of 112.98 against the
greenback, falling to 113.28. Continuation of the yen's downtrend
may see it challenging support around the 114.00 mark.
The Japanese currency edged down to 113.72 against the Swiss
franc and 131.81 against the euro, off its early highs of 113.50
and 131.55, respectively. Further weakness may take the yen to
support levels of around 114.5 against the franc and 133.00 against
the euro.
Following near a 2-month peak of 88.04 hit at 10:35 pm ET, the
yen eased to 88.22 against the loonie. The yen is seen finding
support around the 90.00 area.
On the flip side, the Japanese yen firmed to more than a 5-month
high of 77.41 against the kiwi and held steady thereafter. On the
upside, 76.00 is possibly seen as the next resistance for the
yen.
The yen rose to 86.78 against the aussie, from its early low of
87.08, and traded sideways in subsequent part of the trading
session. The pair was valued at 87.00 when it closed deals on
Monday.
Looking ahead, Eurozone inflation for October, advanced GDP data
for the third quarter and jobless rate for September are set for
release in the European session.
In the New York session, Canada GDP data for August and
industrial product price index for September, as well as
S&P/Case-Shiller home price index for August and U.S. consumer
confidence for October are due.
At 3:30 am ET, the Bank of Canada Governor Stephen Poloz will
testify along with Senior Deputy Governor Carolyn Wilkins before
the House of Commons Standing Committee on Finance, in Ottawa.
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