The yen surged about three per cent against the dollar on Thursday
after the Bank of Japan left markets in shock by failing to deliver more
stimulus for the struggling Japanese economy.
The yen and US dollar notes. (AFP/File/Tang Chhin Sothy)
NEW YORK: The yen surged about three per cent against the
dollar on Thursday (Apr 28) after the Bank of Japan left markets in
shock by failing to deliver more stimulus for the struggling Japanese
economy.
Traders had widely expected the central bank to unveil fresh
measures to shore up the world's number-three economy after this
month's deadly earthquakes in southern Japan and a series of weak data.
But, after a two-day meeting, the BoJ announced it would
stand pat, saying it wanted to gauge the effects of the negative
interest rate policy introduced in January.
"The main takeaway from the BoJ meeting is the Japanese feel
no immediate pressure to use monetary policy or currency intervention
to turn around the economy," said Kathy Lien of BK Asset Management.
"They feel like they've done enough for the time being and want to see how the economy reacts first."
At 2100 GMT Thursday, the dollar bought 108.11 yen, down from 111.47 at the same time Wednesday.
The greenback ended the day lower against its major rivals
after the US government reported first-quarter economic growth slowed to
a paltry 0.5 per cent annual rate from 1.4 per cent in the fourth
quarter.
Analysts had expected a better 0.9 per cent. The data came a
day after the Federal Reserve left ultra-low interest rates unchanged
citing the slowing economy.
"While a weak quarter was largely expected ... the data will continue
to keep the outlook for the next rate hike by the Fed very clouded,"
said Omer Esiner of Commonwealth Foreign Exchange.
- AFP/de
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