2023-10-31 06:25:00
© Archyde.com. The yen tops the list of losing currencies after the Japanese central bank adhered to a very loose monetary policy
FXNEWSTODAY – The Japanese yen fell broadly in the Asian market on Tuesday against a basket of global currencies, resuming its losses that stopped over two days against the American, trading again below the 150 yen barrier, topping the list of losing currencies in the foreign exchange market.
The Japanese currency’s losses come after the Central Bank of Japan announced adherence to the “very loose” monetary policy and continuing to support the recovery of the third largest economy in the world.
Contrary to most expectations, the Bank of Japan refrained from changing its yield curve control (YCC) policy, despite changing the language used around the target range for the benchmark 10-year yield.
Japanese yen exchange rate today
It rose by 0.7% to (150.10 yen), from the opening price of today’s trading at (149.05 yen), and recorded the lowest level at (149.00 yen).
On Monday, the yen rose 0.4% against the dollar, the second daily gain in a row, and recorded a two-week high of 148.80 yen, due to speculation about the monetary policy meeting of the Bank of Japan.
List of losing currencies
Today, Tuesday, the Japanese yen topped the losing list among the eight major currencies in the foreign exchange market, as the Japanese currency witnessed a widespread decline against most major and minor currencies.
With a decline of 0.7% against the US dollar, and a decline of 0.5% against, recording the lowest level in a week at 159.04 yen per euro, it fell by more than 0.4% against the pound, and by more than 0.5% against the Swiss franc, and the yen lost more than 0.5% against the Canadian dollar. By 0.4% against the New Zealand dollar, and by 0.25% against the Australian dollar.
Central Bank of Japan
In line with expectations, the Bank of Japan decided today, Tuesday, not to make any changes to accommodative monetary policy tools, and to keep prices unchanged at the record level of minus 0.1%.
As for the government bond yield curve control (YCC) policy, the Bank of Japan decided to keep the ten-year government bond yield targets unchanged at the level of 0.00%, while keeping the maximum yield at the level of 1.0%.
The bank emphasized that it continues to control the government bond yield curve with greater flexibility up and down, and that the lower (0.00%) and upper (1.0%) limits for the yield serve as a reference point, and not as strict limits in open market operations.
The Bank of Japan said that it is currently appropriate to keep monetary policy unchanged, to support the economic recovery in the country, and stressed that it will continue to buy government bonds on a large scale, and made clear that it will not hesitate to take additional easing measures if necessary.
The Bank of Japan stressed that it will patiently continue monetary easing within the framework of controlling the government bond yield curve (YCC) to support economic activity and create an environment in which wages rise further.
The Bank of Japan indicated that it is appropriate to make the YCC more flexible given the high uncertainty about the economy and markets.
Economic forecasts
The Bank of Japan said in its quarterly economic outlook report issued after Tuesday’s meeting that the Japanese economy is likely to continue to recover moderately.
It is likely to slow, then accelerate again as wages rise, inflation expectations rise, and uncertainty about Japan’s economic price outlook is very high.
•Economic growth: The Central Bank of Japan raised the country’s economic growth expectations during 2023 to 2.0% from a growth rate of 1.3% in July forecasts, and reduced growth expectations during 2024 to 1.0% from a growth rate of 1.2%, and left the growth expectations during 2025 at no rate. Change at a rate of 1.0%.
•Inflation: The Central Bank of Japan raised inflation expectations in the country during 2023 to 3.8% from an inflation rate of 3.2% in July forecasts, inflation expectations during 2024 to 1.9% from 1.7%, and inflation expectations during 2025 to 1.9% from 1.8%.
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