USD/JPY slips after Bank of Japan holds policy unchanged

USD/JPY fell in Asia after the Bank of Japan announced it left its monetary policy unchanged. This was widely expected by the markets however and so disappointment was limited. USD/JPY was already off from its early 118.80 high as investors began paring their positions ahead of the announcement. The pair touched 118.15 going into the announcement and then a rebound back to around 118.40 was followed by a fresh push down through 118.00 to 117.66 post-BoJ. EUR/JPY too reverted down, off from 137.10 to 136.17 post-BoJ .

EUR/USD opened in Asia at 1.1550 after moving lower in the US as the lift from the better German ZEW data faded fast. Idling between 1.1542-60 initially, it got a lift to 1.1573 as USD/JPY fell back through 118.00. The market is unlikely to push EUR/USD too far in either direction ahead of tomorrow’s ECB policy announcement. Fairly aggressive QE has already been discounted, and the market could be setting itself up for some disappointment.

GBP/USD eased to 1.5136 early in Asia trading before bouncing later to 1.5176 as USD/JPY headed south. Conditions were very thin. EUR/GBP looked slightly better bid between 0.7622-34, holding above yesterday’s 0.7614 low and 0.7593 Friday.

USD/CHF treaded water, albeit in nervous fashion between 0.8726-59 and awaiting Europe’s return. EUR/CHF also saw nervous water-treading between 1.0085-1.0115.

AUD/USD opened in Asia at 0.8171 after holding up reasonably well despite broad USD strength in US trading. Short-covering in AUD/NZD looks to have provided some support. Asia saw AUD/USD fall to 0.8155 early. Buoyant Asian regional stock market action and moves higher in commodities futures markets helped it track higher thereafter. At 0.8190 at the BoJ policy announcement, it popped to 0.8212 and then 0.8223.

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