Forex: USD/JPY to 4-month high as BoJ keeps policy changes on hold

on Nov 21, 2013
Updated: Oct 21, 2019

**, Thursday 21 November:**

At the begging of today’s European session, the USD/JPY reached a four-month high of 100.84, following the Bank of Japan’s decision to keep monetary policy on auto-pilot.
As widely expected, the Bank of Japan concluded its penultimate meeting in 2013 with a unanimous vote to maintain the Bank’s current mix of monetary policy instruments, specifically the annual pace of money market operations at 60-70 trillion yen. The BoJ repeated that the Japanese economy stays on track for a gradual recovery, despite a high degree of uncertainty concerning global growth.

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Although the third-quarter GDP reading showed annualized economic growth halving to 1.9 percent from 3.8 percent, policy makers viewed the dip as temporary, sticking with their prior positive assessments. The central bank expects annual inflation to “rise gradually” toward its two percent target from under one percent now.
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The board upgraded slightly its assessment of overseas economies, saying that they “as a whole are picking up moderately, although a lacklustre performance is partly seen”. Last month the BoJ held the view that foreign economies were “gradually heading toward a pick-up”.

“I don’t see a big risk of emerging economies worsening sharply from current levels,” added BoJ governor Haruhiko Kuroda at the post-announcement press conference.

In addition, Kuroda reiterated that the central bank won’t hesitate to make policy adjustments if needed, underlining his commitment to the Japanese government’s growth strategy. He stressed that the BoJ has further room for policy action.

In the US, the Department of Labor is due to release the Unemployment Insurance Initial Claims for last week at 13.30 UTC, with forecasts for a decline from the prior number of 339,000 to 333,000.
Right now, the USD/JPY is trading around 100.79, up 0.54 percent intraday.
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