Yen weaker on Bank of Japan decision

The Japanese yen was weaker on Thursday after the Bank of Japan decided to keep interest rates at their current level for the present. Up until a day or two ago, most analysts expected that the Bank would raise rates by 25 basis points to 0.5 percent, but the Bank’s board voted by 6 to 3 to keep rates at 0.25 percent for at least one more month. There have been indications that the Japanese government brought pressure to bear on the Bank to leave rates on hold, fearing that a rate hike could have a negative effect on the nation’s economic recovery.

The yen dropped 0.6 percent to ¥121.30 against the US dollar, while it was 0.7 percent lower in relation to the euro, to ¥157.10. The Japanese currency fell a full 1 percent to ¥240.00 versus sterling, its lowest level in nine years. Some analysts see the yen weakening even further in the next few months.

The Swiss franc was weaker as well as it dropped 0.2 percent versus the euro to SFr1.2500 and fell 0.3 percent against sterling, to SFr2.4630.

Sterling strengthened against the euro, to £0.6555, while it added 0.2 percent versus the greenback to $1.9730. The US dollar was higher in relation to the euro early, but dropped to 0.1 percent lower at $1.2950 on rumors, denied by officials, that an Iranian missile had hit a US warship in the Arabian Gulf.

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