USDJPY plunges 2 percent after BoJ disappoints and holds policy

The yen strengthened on Thursday after the Bank of Japan surprised markets by keeping monetary policy steady.

After a two-day policy meeting, the BOJ showed that it is in a wait-and-see mode to judge the effects of its negative rate policy. It left its main interest rate unchanged at minus 0.1 percent by a 7-2 vote. Its asset purchase program was left at an annual pace of 80 trillion yen by a 8-1 vote.

Markets were disappointed on the news as they expected the BoJ to take some action in order to stimulate the Japanese economy and to deal with low inflation.

USDJPY tumbled 2 percent after the news to touch a low of 108.73, a more than one week low.

Meanwhile, the US Federal Reserve announced on Wednesday its decision to hold rates. The Fed statement sounded a bit more hawkish overall though and this initially supported the dollar. However, this rapidly changed after the BoJ announcement.

Another central bank meeting today was by the Reserve Bank of New Zealand (RBNZ) which also left interest rates unchanged. The benchmark rate was left on hold at 2.25% today. The kiwi jumped on the news as markets push back expectations for a rate cut in June.

NZDUSD rose to 0.6919, up 0.52%, after the RBNZ announcement.

In other currencies, EURUSD traded up to $1.1343 while GBPUSD hovered around $1.4540.

The post USDJPY plunges 2 percent after BoJ disappoints and holds policy appeared first on FXTM Blog.

Source:: USDJPY plunges 2 percent after BoJ disappoints and holds policy

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