Dollar falls against yen after BOJ keeps monetary policy steady
The dollar slipped against the yen on Friday after the Bank of Japan stood pat on monetary policy, disappointing some speculators who had bet that the central bank would expand its already massive stimulus.
The dollar was down 0.2 percent at 120.82 yen after dipping to as low as 120.29 following the central bank’s announcement.
The BOJ decision had drawn more attention than usual after a run of downbeat Japanese indicators had fanned expectations that the central bank would increase the stimulus dosage.
Bank of Japan could send dollar toward milestone
After appreciating by 15% against the yen USDJPY, +0.21% in 2014, the dollar is up less than 1% this year. Since January, the buck has posted fresh 12-year highs against the yen on several occasions, only to retreat due to the Federal Reserve’s reluctance to raise interest rates.
Most recently, the dollar rose to a 12-year high against the yen on June 5, when it hit ¥125.77, according to FactSet data. On Thursday, a dollar bought ¥121.10, little-changed from its level late Wednesday.
The dollar’s minuscule year-to-date gains have been due to an “interlude” in the trend of monetary policy divergence.
Sterling trades above $1.52, but lags euro on soft UK data
Sterling rose 0.4 percent against a struggling dollar on Tuesday, as investors fretted about when the U.S. Federal Reserve will raise interest rates amid growing doubts over a global recovery.
The International Monetary Fund (IMF) cut its global growth forecasts for a second time this year on Tuesday, citing weak commodity prices and a slowdown in China and said policies aimed at increasing demand were needed.
| Important events and their explanation: |
| Time ( IST) | Currency | Economic Data | Actual | Expectation | Previous |
| 5:00am | JPY | Tokyo Core CPI y/y | -0.20% | -0.20% | |
| 8:52am | JPY | Monetary Policy Statement | |||
| 11:30am | JPY | BOJ Outlook Report | |||
| Tentative | JPY | BOJ Press Conference | |||
| 6:00pm | USD | Employment Cost Index q/q | 0.60% | 0.20% |
Explanation:- Why we assume BOJ outlook is more important because looking Japanese inflation growth numbers we assume JPY will maintain there current pace of stimulus . Hence this would be negative for JPY and positive for the equity markets.
| Quick Glance : |
| Instrument | Price | %Chg | Volume | OI |
| USD/INR | 64.92 | 0.17 | 788526 | 960103 |
| EUR/INR | 71.82 | -0.82 | 37048 | 48836 |
| GBP/INR | 99.25 | 0.07 | 21059 | 41217 |
| JPY/INR | 53.93 | -0.64 | 7908 | 15311 |
| Technical touch : |
USDINR
Pair is trading near its crucial resistance hence we expect a minor fall till 65.05-64.98 levels.