Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Yen slumps to 9-year low vs euro after BOJ maintains ultra-low rates

Yen slumps to 9-year low vs euro after BOJ maintains ultra-low rates

The Japanese yen fell to a nine-year low against the euro on Friday after the Bank of Japan left its ultra-easy monetary policy unchanged even as it scrapped a pledge to keep interest rates low, according to Reuters.
The euro briefly rose to its highest level against the yen since December 2014 at 149.50. It was last up 1 percent at 148.98 yen with expectations the European Central Bank will hike rates again next week also supporting the single currency.

The outcome of new BOJ Gov. Kazuo Ueda’s first policy meeting was closely watched. As expected, the BOJ said it would maintain ultra-low interest rates, and unanimously decided to make no changes to its yield curve control policy.

However, the central bank removed a pledge to keep interest rates at “current or lower levels” and said it would “conduct a broad-perspective review of monetary policy.”

That review is expected to last around one to one-and-a-half years and would lay the groundwork for Ueda to gradually phase out his predecessor’s massive stimulus program.

The yen fell sharply also against the US dollar, down 1.3 percent to 135.78, its lowest since March 10.

“The hopes of a policy change has been somewhat dampened by the review,” said Moh Siong Sim, a currency strategist at Bank of Singapore, adding that the likely length of the review might have cooled hopes of an imminent move in the policy setting.

“For now, the outcome is read as a dovish outcome.”

On Friday, however, government data showed core consumer prices in Japan’s capital, Tokyo, rose 3.5 percent in April from a year earlier, beating market forecasts in a sign of broadening inflationary pressure in the world’s third-largest economy.

“This puts pressure on the BOJ, they might do something in the near future,” said Tina Teng, market analyst at CMC Markets.

Elsewhere, the euro fell 0.4 percent to $1.10986, but remained near its recent one-year high, after German first quarter growth came in weaker than expected. Bloc-wide gross domestic product figures are due at 0900 GMT.

The common currency was eyeing a monthly gain of more than 1.3 percent buoyed by expectations that the ECB still has further to go in raising interest rates, analysts said.

The International Monetary Fund called on the ECB on Friday to keep raising interest rates until the middle of 2024 and on EU finance ministers to tighten fiscal policy, in concerted action to bring down high inflation.

“Investors favor currencies that can offer both an ongoing domestic tightening cycle and still some room for a hawkish surprise at the coming meetings,” said ING analysts.

“In that sense, the euro is one of the very few currencies that can offer this combination at the moment.”

In the wider currency market, the US dollar rose broadly on Friday, drawing support from data pointing to still-sticky inflation, which reinforced expectations for a 25-basis-point rate hike at next week’s FOMC meeting.

The US dollar index gained 0.5 percent to 101.93, rebounding from a near two-week low struck on Wednesday.

However, the index remained on track for a monthly loss of close to 0.8 percent, after having fallen about 2.3 percent in March.

Data released on Thursday showed that while US economic growth slowed more than expected in the first quarter, consumer spending, which was accompanied by a rise in inflation, accelerated.

“The Fed is widely expected to hike again next week but with inflation remaining sticky, we expect the Fed to stay on hold for the remainder of the year, dashing hopes of a policy pivot in (the second half),” said analysts at Societe Generale.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Putin Celebrates ‘Unprecedentedly High’ Ties with China as Gazprom Seals Power of Siberia-2 Deal
China Unveils New Weapons in Grand Military Parade as Xi Hosts Putin and Kim
Rapper Cardi B Cleared of Liability in Los Angeles Civil Assault Trial
Google Avoids Break-Up in U.S. Antitrust Case as Stocks Rise
Couple celebrates 80th wedding anniversary at assisted living facility in Lancaster
Information Warfare in the Age of AI: How Language Models Become Targets and Tools
The White House on LinkedIn Has Changed Their Profile Picture to Donald Trump
"Insulted the Prophet Muhammad": Woman Burned Alive by Angry Mob in Niger State, Nigeria
Trump Responds to Death Rumors – Announces 'Missile City'
Druzhba Pipeline Incident Sparks Geopolitical Tensions
Cost of Opposition Leader Péter Magyar's Economic Plan Revealed
Germany in Turmoil: Ukrainian Teenage Girl Pushed to Death by Illegal Iraqi Migrant
United Krack down on human rights: Graham Linehan Arrested at Heathrow Over Three X Posts, Hospitalised, Released on Bail with Posting Ban
Asian and Middle Eastern Investors Avoid US Markets
Ray Dalio Warns of US Shift to Autocracy
Eurozone Inflation Rises to 2.1% in August
Russia and China Sign New Gas Pipeline Deal
Von der Leyen's Plane Hit by Suspected Russian GPS Interference in an Incident Believed to Be Caused by Russia or by Pro-Peace or by Anti-Corruption European Activists
China's Robotics Industry Fuels Export Surge
Suntory Chairman Resigns After Police Probe
Gold Price Hits New All-Time Record
UK Fintechs Explore Buying US Banks
Greece Suspends 5% of Schools as Birth Rate Drops
Apollo to Launch $5 Billion Sports Investment Vehicle
Bolsonaro Trial Nears Close Amid US-Brazil Tension
European Banks Push for Lower Cross-Border Barriers
Poland's Offshore Wind Sector Attracts Investors
Budapest Central European Fashion Week Kicks Off
U.S. Celebrates Labor Day
Hungarian National Team Captain Scores Epic Goal
EU is getting aggressive: Four AfD Candidates Die Unexpectedly Ahead of North Rhine-Westphalia Local Elections
Japanese Customer Sways from VW to BYD after “Unbelievable” Test Drive amid Dealership Expansion
Nestlé Removes CEO Laurent Freixe Following Undisclosed Relationship with Subordinate
Pickles are the latest craze among Generation Z in the United States.
Giuliani Seriously Injured in Accident – Trump to Award Him the Presidential Medal of Freedom
Deadline Day Delivers Record £125m Isak Move and Donnarumma to City
Nvidia Reveals: Two Mystery Customers Account for About 40% of Revenue
Woody Allen: "I Would Be Happy to Direct Trump Again in a Film"
Lula and Putin Hold Strategic BRICS Discussions Ahead of Trump–Putin Summit
White House Eyes Budapest for Peace Talks
Cave Diving Beneath the Streets of Budapest
Another American Restaurant Chain Opens in Budapest
Hungarian Opposition Politician Supports Ukrainian Commander
Opposition Leader Threatens Media Outlets
American Airlines Adds New Flights to Budapest
F1 Hungarian Grand Prix Wraps Up
WhatsApp is rolling out a feature that looks a lot like Telegram.
U.S. Trade Representative says Washington still negotiating trade deals after court rules tariffs illegal
Von der Leyen says Europe drawing up 'precise' plans to send troops to Ukraine
Kremlin accuses Europe of hindering Trump’s peace efforts in Ukraine
×