Forex Asia Review – Yen gains after BOJ opts not to ease monetary policy further

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Yen initially fell in a knee-jerk reaction after the Bank of Japan policy statement but then rose again. There was confusion at first when the the BOJ said it made a technical change to its asset purchase program but then said it maintained the actual size of the programme at 70 trillion yen. The overnight call rate was maintained at 0.0-0.1 percent. Yen soon recovered losses after markets digested the news. USDJPY briefly spiked to 79.93 then fell to 79.42. EURJPY initially jumped to 97.84 before erasing gains and fell to 97.22. The BOJ had last eased policy in April via an increase to its asset purchase programme.


Euro consolidated losses during the Asian session after reaching a two-year low yesterday following the FOMC minutes. EURUSD traded a range between 1.2222 and 1.2243. Euro remains vulnerable as it is weighed down by euro zone debt troubles.


Against sterling, euro moved off a 3-1/2 year low of 0.7869 hit yesterday and traded a tight range in Asia between 78.83 pence and 78.98.


USDCHF held onto post-FOMC gains after hitting a 1-1/2 year high of 0.9830. The Fed sounded less dovish but did not hint on any QE3 in the near term. This helped boost dollar.


Aussie dropped sharply after weak Australian unemployment data. The number of jobs created dropped by 27,000 in June. Before the data AUDUSD drifted between 1.0236-58 and then plunged to to 1.0173 after the release.