FOREX-The Japanese yen hits 34-year low after BOJ keeps interest rates on hold

The yen hit its weakest point in three decades against the US dollar after the Bank of Japan left interest rates unchanged on Friday, leaving traders on edge about when and to what extent authorities in Tokyo might intervene. The yen fell about 0.2%, weakening to 156.1 per dollar in the minutes after the announcement. The yen also fell to its weakest in almost 16 years, at 167.38 per euro, and its weakest in almost 10 years against the Australian dollar.

The Bank of Japan kept its short-term interest rate target at 0-0.1% and expected inflation to remain around 2% over the next three years. Markets had not expected any policy change, so the moves were modest and the focus is now on the tone and vision of Governor Kazuo Ueda at his press conference at 3:30 PM in Tokyo (06:30 GMT).

The yen’s 9% decline against the dollar this year is the largest decline of all G10 currencies, mainly due to the large difference between yields on US and Japanese government bonds, which are more than 375 basis points over a ten-year term. amounts to. The yen has fallen past the 152 and 155 levels to the dollar, with traders wary of pushback or intervention from Japan, although markets remain on high alert for official buying.

Japanese Finance Minister Shunichi Suzuki said on Friday he was closely monitoring currency movements and was prepared to take full action in response. Elsewhere, the dollar had fallen after weaker-than-expected US growth data, while government bond yields rose on a warmer-than-expected inflation gauge.

The euro rose 0.3% to a two-week high of $1.0728 on Thursday after data showed the US grew at its slowest pace in almost two years in the first quarter. The annualized rate of 1.6% missed economists’ forecasts by 2.4%. The Australian dollar, boosted by warmer-than-expected inflation this week, briefly surpassed the 200-day moving average to reach $0.6539 before settling around $0.6522 in Asian trading on Friday.

Sterling rose 0.4% on Thursday and was last at $1.2503. The New Zealand dollar was slightly firmer at $0.5960 in morning trading in Asia, having risen in the previous four sessions.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)