USDJPY tumble after Bank of Japan leaves policy unchanged

The Japanese yen jumped by over one per cent against the US dollar after the Bank of Japan did not take any action to launch more stimulus measures at its policy meeting on Thursday. The BoJ announced that it kept the annual pace of its asset-purchase programme unchanged at 80tn yen and left deposit rates steady at minus 0.1 per cent.

USDJPY fell below 105 yen to 104.53, which was the pair’s lowest level since September 2 2014.

Meanwhile, on Wednesday, the US Federal Reserve also announced monetary policy decision and held off raising interest rates, partly due to the risk of the British EU referendum next week.

The Fed’s dovish policy statement pressured the US dollar and sent gold surging to $1300. The precious metal is sensitive to interest rates and since the Fed has been holding back on rate hikes, investors prefer to buy gold.

The dollar index, a measure of the US currency versus a basket of global peers, sank as much as 0.3 per cent to 94.327 in Asian trading.

In other news today, Australia released its employment report showing 7,900 jobs were created in May, which was more than expected, and the unemployment rate remained steady at 5.7 per cent. However, all those jobs were part-time, prompting economists to question the overall quality of those gains.

AUDUSD had a brief spike higher after the jobs numbers, but has now settled in to be 0.1 per cent lower around $0.7390 and the worst-performing Asian currency today.

Sterling was down 0.2 per cent at $1.4183 ahead of the Bank of England’s policy meeting later today.

Oil prices remained under pressure, with Brent crude falling 0.7 per cent at $48.64 a barrel and WTI oil slipped 0.9 per cent at $47.57.

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