In a surprise move, the Bank of Japan announced a new round of easing. Earlier, the yen had been gaining in spite of unfavorable data. Now, though, the yen is heading much lower in the wake of this latest announcement.
Japanese data showed disappointing news in terms of unemployment and CPI data earlier. Additionally, household spending was lower. All of the news pointed to slowing growth as the Bank of Japan met for a policy meeting. Even with the unfavorable data, though, few analysts expected the announcement that came at the end of the meeting.
In a vote of five to four, the policymakers at the Bank of Japan decided to add fresh easing to the Japanese economy. This move is shocking analysts and markets, and sending the yen much lower against its counterparts. About 80 trillion will be used to purchase government bonds, and the government is also interested in purchasing other assets, including real estate investment trusts.
Japanese policymakers call the combined easing programs “quantitative and qualitative” and say that they will keep them in place for as long as needed.
At 10:54 GMT USD/JPY is up to 111.7380 from the open at 109.2070. EUR/JPY is up to 140.5020 from the open at 137.7580. GBP/JPY is up to 178.7460 from the open at 174.7450.
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