Yen Muted After BoJ Maintains Monetary Policy, Changes Forward Guidance

The Japanese yen showed muted trading against its major counterparts in the Asian session on Thursday, after the Bank of Japan maintained its policy rates, but modified its forward guidance on interest rates signaling chance of a rate cut in future.

The Policy Board of the BoJ voted 7-2 to maintain interest rate at -0.1 percent on current accounts that financial institutions maintain at the bank.

The bank said it will purchase government bonds so that the yield of 10-year JGBs will remain at around zero percent.

The bank modified its forward guidance, saying that interest rates would remain at present or lower levels as long as required to achieve its price stability target.

Data from the Ministry of Economy, Trade and Industry showed that Japan industrial production rose a seasonally adjusted 1.4 percent on month in September.

That beat forecasts for an increase of 0.4 percent following the 1.2 percent decline in August.

The yen weakened against its major counterparts on Wednesday, excepting the greenback.

The yen appreciated to a 6-day high of 108.59 against the greenback at 9:30 pm ET and held steady in subsequent deals. At Wednesday’s close, the pair was worth 108.83.

The yen held steady against the euro, after easing off slightly from a 10-day high of 121.47 hit at 8:45 pm ET. The pair had closed Wednesday’s deals at 121.36.

The Japanese yen depreciated to a 1-week low of 140.57 against the pound, compared to yesterday’s closing value of 140.37. The yen is seen finding support around the 142.5 mark.

The Japanese currency weakened to a 9-day low of 110.19 against the franc, down from Wednesday’s closing quote of 109.99. If the yen falls further, it is likely to test support around the 112.00 region.

Looking ahead, German retail sales for September, Eurozone consumer inflation for October, jobless rate for September and GDP data for the third quarter are due in the European session.

Canada GDP data for August, U.S. weekly jobless claims for the week ended October 26, personal income and spending data for September will be featured in the New York session.

The material has been provided by InstaForex Company – www.instaforex.com