The Japanese yen dropped after the Bank of Japan decided to keep its unprecedented monetary stimulus at today’s policy meeting. The currency trimmed its losses later but still trades below the opening level.
The Japanese central bank announced today:
The Bank of Japan will conduct money market operations so that the monetary base will increase at an annual pace of about 80 trillion yen.
The yen fell after the announcement, driven further down by the lack of safe haven demand following the pause in oil prices decline. Analysts speculate that Japan’s currency will continue to fall against the dollar due to the divergence in monetary policy outlooks for Japan and the United States.
USD/JPY advanced from 118.83 to 118.98 as of 13:47 GMT today following the rally to the daily high of 119.50. EUR/JPY gained from 145.98 to 146.24, touching the daily maximum of 146.74.
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