The Japanese yen strengthened against the other major currencies in the Asian session on Friday, after the Bank of Japan left its monetary policy unchanged at its latest policy decision, as expected by the economists.
The post-meeting policy statement showed that the Monetary Policy Board of the BoJ governed by Haruhiko Kuroda decided by an 8-1 majority vote to maintain its target of raising the monetary base at an annual pace of about JPY 80 trillion. The bank also maintained its asset purchase program unchanged.
Traders now await the BOJ semi-annual outlook report and Kuroda’s press conference for more hints on the economic outlook.
In other economic news, data from the Ministry of Internal Affairs and Communications showed that consumer prices in Japan were flat on year in September. That matched expectations while slowing from 0.2 percent in August. On a monthly basis, overall inflation added 0.1 percent while core inflation was flat.
Also, the unemployment rate in Japan came in at a seasonally adjusted 3.4 percent in September, unchanged and in line with expectations. The number of employed persons in September was 64.39 million, an increase of 370,000 or 0.6 percent on year.
Meanwhile, Asian stock markets traded lower, as investors continued to digest the Federal Reserve’s monetary policy statement that kept the door open for an interest rate hike in December. Weaker commodity prices also weighed on the sentiment.
Thursday, the yen showed mixed performance against its major rivals. While the yen rose against the euro and the Swiss franc, it held steady against the U.S. dollar. The Japanese unit fell against the pound.
In the Asian trading, the yen rose to nearly a 4-week high of 85.51 against the Australian dollar and a 2-day high of 120.29 against the U.S. dollar, from yesterday’s closing quotes of 85.99 and 121.11, respectively. If the yen extends its uptrend, it is likely to find resistance around 84.00 against the aussie and 119.00 against the greenback.
Against the euro and the Swiss franc, the yen advanced to 132.20 and 121.63 from early 2-day lows of 133.06 and 122.43, respectively. On the upside, 131.00 against the euro and 121.00 against the franc, are seen as the next resistance levels for the yen.
The yen edged up to 184.31 against the pound and 91.45 against the Canadian dollar, from yesterday’s closing quotes of 185.42 and 91.94, respectively. The yen may test resistance near 183.00 against the pound and 89.00 against the loonie.
Meanwhile, the yen dropped to a 3-day low of 81.76 against the NZ dollar, from yesterday’s closing value of 81.05. The yen is likely to find support around the 83.00 area.
The NZ dollar rose after data showed that business confidence in New Zealand bounced back in October.
Looking ahead, Japan housing starts and construction orders data for September is due to be released at 1:00 am ET. Subsequently, Bank of Japan’s semi annual outlook report is slated for release in the pre-European session at 2:00 am ET.
In the European session, German retail sales data for September, Swiss KOF leading indicator for October, Eurozone unemployment rate for September and flash estimate of eurozone CPI for October are set to be published.
At 5:00 am ET, Bank of England’s Executive Director, Financial Stability Strategy and Risk, Alex Brazier is expected to speak at the Presentation at Stress Testing and Macro-prudential Regulation: A Trans-Atlantic Assessment in London.
In the New York session, U.S. personal income and spending data for September, the University of Michigan’s final U.S. consumer sentiment index for October, U.S. Chicago PMI for October, U.S. Baker Hughes rig count data and Canada GDP data for August are set to be announced.
At 10:00 am ET, Federal Reserve Bank of San Francisco President John Williams will deliver a speech titled “Measuring the Natural Rate of Interest” at the Brookings Institution in Washington DC.
Subsequently, at 11:25 am ET, Federal Reserve Bank of Kansas City President Esther George is expected to speak on “Federal Reserve Structure” before the City Age “The New American City” Conference in Kansas City.
The material has been provided by InstaForex Company – www.instaforex.com