Forex News – USDJPY falls to fresh one-month low after BOJ

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USDJPY fell to a one-month low of 81.04 during the European trading session, down from an earlier Asian session high of 81.85. EURJPY also declined, dropping to 105.96 from an earlier high 107.43.

The yen gained strength after the Bank of Japan monetary policy meeting today, which revealed that the central bank refrained from easing monetary policy. Markets were disappointed and risk appetite was dampened, hence reflecting safe haven flows to the Japanese currency. Although the BOJ decision to keep interest rates at record lows between zero and 0.10 percent was widely expected by the markets, some expected more action in terms of policy easing and asset purchasing.

The central bank failed to increase stimulus programs, unlike in previous meetings. The next policy meeting is on April 27.

Immediately after today’s policy meeting, USDJPY dropped to 81.56 from 81.75, and continued to decline into the European trading session, touching a low of 81.25 by 08:00 GMT.

After a press conference, BOJ governor Masaaki Shirakawa said monetary policy should not be directly linked to short-term market moves, stressing that the focus should be on the outlook for the economy and prices.

“We carefully examined the economy and prices at today’s policy meeting. We will examine them particularly closely at our next rate review and make appropriate monetary policy decisions based on our assessment,” Shirakawa said.