Yen Advances As BoJ Leaves Policy Rate, Asset Purchase Program Unchanged

Yen Advances As BoJ Leaves Policy Rate, Asset Purchase Program Unchanged

In the Asian session on Friday, the Japanese yen that recouped from its early losses against other major currencies climbed further after the Bank of Japan decided to leave its key policy rate and the stimulus program unchanged.

The benchmark overnight uncollateralized call rate was left unchanged at 0-0.1 percent. The Policy Board also decided to maintain the size of the asset purchase and credit facility at JPY 55 trillion and JPY 25 trillion respectively.

The decision was in line with expectations. Meanwhile, downgrading the economic assessment for a second time, the Board noted that Japan's economic activity is leveling off more or less and is expected to remain so for the time being.

Last month, the central bank announced a fresh round of stimulus to revive the economy by expanding the asset purchase by JPY 10 trillion to JPY 80 trillion.

The yen is now trading at a 2-day high of 78.29 against the greenback, recovering from an early low of 78.58. If the yen rises further, it may target 78.00 level. The pair ended yesterday's deals at 78.49.

The yen bounced back from a 3-day low of 80.68 against the Australian dollar and is now trading at 80.41. At Thursday's close, the pair was quoted at 80.40.

The survey results released by the Australia Industry Group and the Housing Industry Association said that Australia's construction industry fell further into contraction in September.

The group's Performance of Construction Index fell by 1.3 points to 30.9.

After sliding to more than 2-week lows of 84.47 against the franc and 102.30 against the euro, the yen gained shortly. The yen is now trading at 84.16 against the franc and 101.95 against the euro, compared to yesterday's New York session close of 84.38 and 102.19, respectively.

The International Monetary Fund has no fixed timeline for the troika report on Greece, IMF External Relations Department Director Gerry Rice said Thursday.

"Everyone is moving as fast as they can given the difficult situation facing Greece," he said. "Urgency is of the essence, but again I don't have a timeline for you in terms of report of the mission and how that fits with the Euro Group and the European Council."

Against the pound and the loonie, the yen bounced back from 2-week lows of 127.25 and 80.15 and is now worth 126.85 and 79.93. The pound-yen and the loonie-yen pairs were worth 127.11 and 80.08, respectively at yesterday's close.

The yen also edged up to 64.50 against the NZ dollar, reversing from a 2-day low of 64.73. The pair was quoted at 64.52 Thursday.

German factory orders data for August is due in the European session.

Canada jobs data for September, building permits for August, U.S. jobs data for September and consumer credit for August are slated for release in the American session.