The Japanese yen slipped against the other major rivals in early European deals on Wednesday, as traders await monetary policy outcome by the Bank of Japan, due tomorrow, amid expectations that it would continue its massive easing programme.
The central bank has been conducting money market operations such that monetary base increase at an annual base of 80 trillion yen. The bank is unlikely to expand its stimulus programme during the policy gathering.
The bank has indicated that it saw no urgency to fightback the recent decline in inflation driven by lower energy prices.
The BoJ will also release its semi-annual economic outlook report, which is forecast to show modest downward revisions to its economic growth and inflation forecasts for the current fiscal year.
The U.S. Federal Reserve will conclude its two-day monetary policy meeting later today. Although the Fed is expected to stand pat at its April meeting, traders watch accompanying statement for clarity on interest rate hike.
The Fed said conclusively at its March meeting that interest rates will be data-dependent. Public remarks of Fed officials since the March meeting also emphasized a cautious approach to interest-rate increases.
The yen held steady against its major rivals in the Asian session.
In European deals, the yen declined to more than a 3-1/2-month low of 99.15 against the loonie, while falling to 131.27 against euro, its lowest since April 6. The yen ended Tuesday’s trading at 98.75 against the loonie and 130.46 against the euro. The next possible support for the yen is seen around 100.00 against the loonie and 132.00 against the euro.
The yen slipped to 183.52 against the Sterling, a level not seen since March 10. The pair was worth 182.28 when it ended Tuesday’s trading. The yen is likely to find support around the 185.00 level.
The yen dropped to a session’s low of 125.03 against the franc and a 2-day low of 119.29 against the greenback, off early high of 124.13 and a 9-day high of 118.75, respectively. At yesterday’s close, the yen was worth 124.37 against the franc and 118.84 against the greenback. On the downside, the yen is likely to face support around 126.00 against the franc and 120.00 against the greenback.
Looking ahead, preliminary German inflation report for April, Canada industrial product price and raw materials price indices for March, U.S. first quarter GDP data and U.S. pending home sales data for March are set to be published in the New York session.
At 2:00 pm ET, Federal Reserve will announce its decision on monetary policy. The Fed is expected to hold rates at 0.25 percent.
The material has been provided by InstaForex Company – www.instaforex.com