Forex News: Yen Falls After BoJ Rate Decision

Yen Falls After BoJ Rate Decision

(RTTNews) - The Japanese yen weakened against other major currencies in the Asian session on Thursday, after the Bank of Japan left its interest rate unchanged, and kept its real growth and inflation outlook more or less unchanged.

The policy board of the Bank of Japan decided, by a 7-2 majority vote, to hold the uncollateralized overnight call rate at around 0.5 percent.

The BoJ kept its inflation outlook unchanged for the current fiscal year and for the coming two years.

For the fiscal 2025, inflation is seen at 2.7 percent before easing to 1.8 percent in the next fiscal year. Inflation is projected to reach the 2 percent target in the fiscal 2027.

The BoJ noted that economic growth is set to rise, with overseas economies returning to a moderate growth path.

The bank slightly raised its growth forecast for the current fiscal year to 0.7 percent from 0.6 percent. Meanwhile, the outlook for the fiscal 2026 and 2027 was retained at 0.7 percent and 1.0 percent, respectively.

Asian stock markets traded higher amid optimism about a potential trade deal between the U.S. and China as US President Donald Trump and Chinese President Xi Jinping meet. Traders also react to another quarter point interest rate cut by the US Fed.

However, Fed Chair Jerome Powell's post-meeting comments triggered doubts about the likelihood of a rate cut in December. He said a December rate cut is 'far from' a foregone conclusion. He noted Fed officials had "strongly differing views about how to proceed" at the final meeting of the year.

Recently confirmed Fed Governor Stephen Miran once again preferred a half point rate cut, while Kansas City Fed President Jeffrey Schmid preferred to leave rates unchanged.

Highlighting the high level of uncertainty due to government shutdown delaying key data, Powell also said there's a "growing chorus" that feels the Fed should "wait a cycle" to continue cutting rates.

Following Powell's comments, CME Group's FedWatch Tool indicates the chances the Fed leaves rates unchanged in December have jumped to 34.1 percent from just 9.1 percent recently.

Traders await the European Central Bank's (ECB) interest rate announcement due later in the day.

In the Asian trading today, the yen fell to a 3-day low of 153.13 against the U.S. dollar, from yesterday's closing value of 152.73. The next possible downside target for the yen is seen around the 154.00 region.

Against the euro and the pound, the yen slid to 2-day lows of 177.79 and 202.10 from Wednesday's closing quotes of 177.22 and 201.52, respectively. On the downside, 178.00 against the euro and 205.00 against the pound are seen as the next support level for the yen.

The yen edged down to 153.13 against the Swiss franc, from yesterday's closing value of 190.90. The yen may test support near the 193.00 region.

Against Australia, the New Zealand and the Canadian dollars, the yen slid to a 3-week low of 100.90, a 3-day low of 88.44 and nearly a near 10-month low of 109.86from Wednesday's closing quotes of 100.44, 88.03 and 109.57, respectively. If the yen extends its downtrend, it is likely to find support around 102.00 against the aussie, 89.00 against the kiwi and 110.00 against the loonie.

Looking ahead, Germany and Eurozone unemployment rate for October, GDP data for the third quarter, and Eurozone economic sentiment for October are slated for release in the European session.

In the New York session, Germany CPI data for October, U.S. new home sales for September, GDP data for the third quarter, U.S. PCE prices and real consumer spending for the third quarter and Canada average weekly earnings data are set to be released.

At 9:15 am ET, the European Central Bank is set to announce its interest rate decision. The ECB is anticipated to maintain its benchmark rate unchanged at 2.00% for a third consecutive meeting.

For comments and feedback: contact editorial@rttnews.com

Copyright(c) 2025 RTTNews.com. All Rights Reserved

Market News provided by RTTNews