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Japanese yen drops as BoJ stands pat on rates,

Shares in Tokyo rise as BoJ to cut bond purchases, details to come in one months' time

Japanese shares surged on Friday, outperforming other weaker Asian markets, as the yen dropped sharply following the Bank of Japan's announcement to begin trimming its substantial bond purchases in the future, dashing some expectations it would begin the process sooner.

Tokyo's Nikkei 225 index rose 0.3%, while the Japanese yen fell to 158.19 per dollar, its lowest in over six weeks. This shift comes as the BoJ signals a gradual retreat from its extensive monetary stimulus. The Nikkei 225 has gained 16% so far this year.

Investors are also weighing the outlook for US interest rates after the Federal Reserve softened its stance on rate cuts despite the May CPI reading coming in lower than expected. The dollar index, a gauge of the greenback's strength against six major peer currencies, hovered near a one-month high, reflecting the Fed's hawkish tone.

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கடந்தகால செயல்திறன் எதிர்கால முடிவுகளின் நம்பகமான குறிகாட்டியாக இருப்பதில்லைை.

உங்கள் கணக்கின் நாணயத்திலிருந்து வேறுபட்ட நாணயத்தில் குறிப்பிடப்பட்ட கருவிகளின் அனைத்து நிலைகளும், நிலை வெளியேறும் இடத்திலும் மாற்று ஃபீஸ் விதிக்கப்படும்.

BoJ plans to lay out bond purchase tapering plan in July

The BoJ will continue its current bond-buying pace of approximately 6 trillion yen ($38 billion) per month but plans to outline its tapering strategy for the next one to two years in July.

The BoJ intends to gather feedback from market participants before finalizing the long-term tapering plan at its next meeting. As anticipated, the BOJ maintained its short-term policy rate target at 0-0.1% by unanimous vote.

Japanese yen falls over 10% vs. USD this year

The Japanese yen, which is highly sensitive to U.S. Treasury yields, has depreciated over 10% against the dollar this year, last trading at 158.15 per dollar, down over 0.6% for the day.

The yen is near levels last seen on April 29, when it hit a 34-year low of 160.245, prompting multiple currency interventions by Japanese authorities totaling 9.79 trillion yen ($62.25 billion).

BoJ stands pat on rates and

Analysts say Bank of Japan “stalling”, “kicks can” to next policy meeting

"If BoJ wanted to arrest any weakness in JPY, today’s statement wasn’t helpful”, Tom Kenny, senior international economist at ANZ, told Reuters, highlighting that the announcement on quantitative tightening was somewhat disappointing. He added:

"The BoJ more or less kicked the can to the next meeting”.

Osamu Takashima, a currency strategist at Citi, described the BoJ's move as a “stalling tactic,” though he suggested it might still strengthen the Japanese yen. Takashima added that weakening U.S. inflation could signal the beginning of a U.S. monetary easing cycle, potentially enhancing the effectiveness of the BOJ's approach.

The Japanese yen was last down 0.41% against the U.S. dollar on the day, trading at 157.67. JPY has lost over 11.5% against USD this year.


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