Yen soars as BoJ holds fire on stimulus

AFP, TOKYO: The yen surged yesterday after the Bank of Japan held fire on fresh stimulus measures, as fears over Britain’s future in the EU pummel financial markets around the world.
Japan’s currency powered to 103.55 against the dollar, its strongest level since the summer of 2014, as the central bank voted to keep a massive 80 trillion yen annual asset-buying plan unchanged, despite the weak economy.
The unit was at a more than three year high of 116.92 against the euro in the afternoon.
The Japanese currency’s surge took a bite out of Tokyo’s benchmark Nikkei stock index, which dived more than three percent, as the strong yen threatened the profit outlook for Japan’s exporters.
“Policymakers concluded that they need to take a wait-and-see position since the high yen is largely linked to concerns about Brexit,” said Ryutaro Kono, chief economist for BNP Paribas in Tokyo. The BoJ’s decision comes after the Federal Reserve on Wednesday held off raising interest rates and its boss Janet Yellen sounded a warning over a possible British exit—or Brexit—from the EU.
Her comments had sent the dollar tumbling against the yen in US trade, with the losses picking up after the Japanese central bank ended its policy meeting. Another round of easing from the BoJ would tend to weaken the yen, which has been gaining favour as investors seek out assets seen as safe bets.
“The yen is being bought because some traders had expected more easing (from the BoJ) but the bank didn’t make a move,” said Marito Ueda, a senior dealer of FX Prime in Tokyo. “Partly because of concerns over Brexit, the yen had already been bought more than the dollar,” he added.

Yen soars as BoJ holds fire on stimulus

AFP, TOKYO: The yen surged yesterday after the Bank of Japan held fire on fresh stimulus measures, as fears over Britains future in the EU pummel financial markets around the world. Japans currency powered to 103.55 against the dollar, its strongest level since the summer of 2014, as the central bank voted to keep a massive 80 trillion yen annual asset-buying plan unchanged, despite the weak economy. The unit was at a more than three year high of 116.92 against the euro in the afternoon. The Japanese currencys surge took a bite out of Tokyos benchmark Nikkei stock index, which dived more than three percent, as the strong yen threatened the profit outlook for Japans exporters. Policymakers concluded that they need to take a wait-and-see position since the high yen is largely linked to concerns about Brexit, said Ryutaro Kono, chief economist for BNP Paribas in Tokyo. The BoJs decision comes after the Federal Reserve on Wednesday held off raising interest rates and its boss Janet Yellen sounded a warning over a possible British exitor Brexitfrom the EU. Her comments had sent the dollar tumbling against the yen in US trade, with the losses picking up after the Japanese central bank ended its policy meeting. Another round of easing from the BoJ would tend to weaken the yen, which has been gaining favour as investors seek out assets seen as safe bets. The yen is being bought because some traders had expected more easing (from the BoJ) but the bank didnt make a move, said Marito Ueda, a senior dealer of FX Prime in Tokyo. Partly because of concerns over Brexit, the yen had already been bought more than the dollar, he added.