In the aftermath of the Bank of Japan’s policy meeting the Yen was broadly stronger and the Euro to Yen pairing slipped.
The Euro was locked in a fairly narrow trading range with several of its other most traded peers on Tuesday due to a lack of significant economic data for the Eurozone.
Although reports showed that the Bank of France business sentiment gauge advanced from 98 to 99 in March and that the French trade deficit narrowed by more than forecast in February, Euro movement was restrained ahead of tomorrow’s more influential German trade data.
The Yen, on the other hand, was enjoying a bullish relationship with several of its most traded currency counterparts thanks to the BOJ’s decision to refrain from adding to stimulus.
BOJ Governor Haruhiko Kuroda asserted that the nation’s labour market has shown improvement more quickly than anticipated and that while the consumption tax hike has caused fluctuations, the economy has continued recovering.
The BOJ stated; ‘Private consumption and housing investment have remained resilient as a trend with improvement in the employment and income situation.’
Although industry experts expect the central bank to introduce additional stimulus in the near future, the decision to hold policy at this latest meeting was anticipated by the majority.
In the opinion of Capital Economics; ‘We still think that inflation will continue to fall short of the BOJ’s 2% inflation target, which should eventually prompt the central bank to announce more stimulus. But this decision can wait until the second half of the year, perhaps until October.’
The Yen consolidated gains against almost all of its currency counterparts in the hours following the decision, posting notable gains against rivals like the US Dollar and Euro.
The Japanese asset was also supported by the news that the domestic Eco watchers current survey advanced from 53.0 in February to 57.9 in March.
During European trading the Euro was holding steady against the US Dollar but lost ground against a supported Pound.
Tomorrow the EUR/JPY pairing could come under pressure as the BOJ’s monthly economic report is published and German trade balance figures are released.
The publication of minutes from the Federal Open Market Committee’s recent policy meeting is also likely to have a widespread impact on the currency market.
Euro (EUR) Exchange Rates
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Currency, ,Currency,Rate ,
Euro,,New Zealand Dollar,1.5897,