Morning Forex Fundamental: JPY

Morning Forex Fundamental: JPY

'The December monetary policy meeting is scheduled to take place after the presumed election date, suggesting pressure for additional easing could exert an influence at an early stage' - Chotaro Morita, chief strategist for fixed income at Barclays Plc

Japan left monetary policy unchanged

Impact: Medium

The Bank of Japan decided to keep its benchmark interest rate unchanged and held off from expanding its asset-purchase programme, switching the focus to a December's meeting, where more stimulus measures are expected to be announced to shore up a shrinking economy. The BoJ left its asset fund at 66 trillion yen, credit-lending facility at 25 trillion yen, while the key interest rate stood between zero and 0.1%.

'The BOJ would likely come under increasing pressure,' Chotaro Morita, chief strategist for fixed income at Barclays Plc in Tokyo, said before today's decision. 'The December monetary policy meeting is scheduled to take place after the presumed election date, suggesting pressure for additional easing could exert an influence at an early stage.'

'The pressure on the BOJ is so strong that I don't think they can avoid easing next month after the results of the election,' said Yasuo Yamamoto, senior economist at Mizuho Research Institute in Tokyo. 'Increasing asset purchases is the most obvious option.'

The Nikkei 225 Stock Average surged 0.71 per cent down, or 65.31 points, to 9,207.95. The broader Topix Index appreciated 0.52 per cent, or 3.94 points, to 765.98.