Article by ForexTime
The yen strengthened on Thursday after the Bank of Japan surprised markets by keeping monetary policy steady.
After a two-day policy meeting, the BOJ showed that it is in a wait-and-see mode to judge the effects of its negative rate policy. It left its main interest rate unchanged at minus 0.1 percent by a 7-2 vote. Its asset purchase program was left at an annual pace of 80 trillion yen by a 8-1 vote.
Markets were disappointed on the news as they expected the BoJ to take some action in order to stimulate the Japanese economy and to deal with low inflation.
USDJPY tumbled 2 percent after the news to touch a low of 108.73, a more than one week low.
Meanwhile, the US Federal Reserve announced on Wednesday its decision to hold rates. The Fed statement sounded a bit more hawkish overall though and this initially supported the dollar. However, this rapidly changed after the BoJ announcement.
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Another central bank meeting today was by the Reserve Bank of New Zealand (RBNZ) which also left interest rates unchanged. The benchmark rate was left on hold at 2.25% today. The kiwi jumped on the news as markets push back expectations for a rate cut in June.
NZDUSD rose to 0.6919, up 0.52%, after the RBNZ announcement.
In other currencies, EURUSD traded up to $1.1343 while GBPUSD hovered around $1.4540.
Article by ForexTime
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