US Dollar falls against yen after BOJ stands pat

Frankfurt (Oct 30)  The dollar was lower against the yen early Friday, weighed down by the Bank of Japan’s decision to stand pat on its monetary stimulus.

The greenback USDJPY, -0.53%  was down 0.2% at ¥120.68 after falling as low as ¥120.34 in the wake of the decision, according to FactSet data. The dollar also earlier traded as high as ¥121.48 in Friday’s choppy session, supported by a media report that the government is putting together fresh fiscal stimulus, but that advance faded.

The Bank of Japan made no changes to its stimulus program at a meeting on Friday, saying it will maintain its current pace of asset purchases. Ahead of the meeting, analysts had said a move to fortify the program could put the dollar on a path toward ¥130.

“The BoJ chose to leave their quantitative and qualitative easing (QQE) policy on hold at their meeting today — disappointing those calling for an increase,” said Angus Nicholson, market analyst at IG, in a note on Friday.

Time (EDT)Japanese Yen29 Oct8:004:0030 Oct8:004:00

US:USDJPY

120.25120.50120.75121.00121.25121.50

Ahead of Friday’s meeting in Tokyo, analysts had said more stimulus is likely in the near term even with action this week. “They will probably go some time later in Q4,” Win Thin, global head of emerging-market currency strategy at Brown Brothers Harriman, told MarketWatch earlier this week.

The media report on Friday about fresh stimulus came from the Nikkei financial daily, which said the Japanese government is planning to draw up a supplementary budget worth more than ¥3 trillion for the fiscal year ending March 2016 and won’t issue new government bonds to finance it.

The BOJ lowered its forecast for real economic growth in the current fiscal year, from 1.7% to 1.2%.

In other currencies trading, the dollar EURUSD, +0.3188%  was also weaker against the euro, which gained 0.1% to $1.005. The ICE U.S. Dollar DXY, -0.24% was down 0.2% to 97.06.

Source: MarketWatch