The Japanese yen declined to a six-month low against the greenback, dropping to its weakest level since May 29 after Bank of Japan (BoJ) Governor Haruhiko Kuroda said the nation’s economy is recovering at a moderate rate towards the 2% inflation target.
The yen edged 0.55% lower to ¥101.87 against the US dollar at the time of writing, dropping to a six-month low of ¥101.91.
At the same time the Japanese yen dropped 0.49% at ¥137.93 against the 17-nation euro, while it declined 0.46% to ¥165.17 against the UK pound, marking its weakest level since October 2008. Bank of Japan’s (BoJ) Governor Haruhiko Kuroda made a speech at a financial seminar in Tokyo and commented on the economy picking up and would add more stimulus if it’s needed to reach the inflation target.
The latest reports from Japan shows the inflation at 0.7% in the year ended September, which is still below the target; however according to the BoJ chief, the year-on-year rate of change in the CPI would likely follow a rising trend.
On Sunday, the Japanese yen dropped against the greenback, following the agreement that was reached between Iran and the Western powers (Britain, US, France, China, Russia and Germany, to ease an extensive nuclear program in the Persian gulf nation in return for the removal of an estimated $7 billion-worth of sanctions.
Following the Banks of Japan’s two-day meeting, the bank’s policymakers decided to maintain the current level of stimulus in order to achieve its 2% inflation target.
“The BoJ will conduct money market operations so that the monetary base will increase at an annual pace of about 60-70 trillion yen,” according to bank’s the statement.
“In terms of monetary policy, the BOJ has the most loose policy,” Koji Fukaya, chief executive officer and currency strategist at FPG Securities Co. in Tokyo said. “The yen is also being sold as risk sentiment improves,” he added.
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