Japanese Yen Flat vs. US Dollar, Falls vs. Other Majors After BoJ

The Japanese yen remained about flat against the US dollar but fell against other most-traded currencies after the Bank of Japan announced its monetary policy decision during the Asian trading session on Thursday.
Surprising no one, the BoJ kept its benchmark interest rate in the negative territory at -0.1%. The target yield curve and the quantitative easing program remained without changes as well, also matching expectations. The central bank predicted that the economy will be recovering from the pandemic-inflicted issues but the pace of recovery will be moderate:

Japan’s economy is likely to follow an improving trend with the impact of the novel coronavirus (COVID-19) waning gradually, but the pace is expected to be only moderate while vigilance against COVID-19 continues. Specifically, downward pressure stemming from the impact of a resurgence of COVID-19 is likely to remain strong for the time being, particularly in face-to-face services consumption. Thereafter, as the impact subsides globally, the economy is projected to keep improving further with overseas economies returning to a steady growth path.

The bank upgraded its economic projections, raising growth forecast for 2021 to 3.3%-4.0% (median 3.9%) from the October estimate of 3.0%-3.8% (median 3.6%) and for 2022 to 1.5%-2.0% (median 1.8%) from 1.5%-1.8% (median 1.6%). The inflation outlook got a positive revision from 0.2%-0.6% (median 0.4%) to 0.3%-0.5% (median 0.5%) for 2021 and from 0.4%-0.7% (median 0.7%) to 0.7%-0.8 (median 0.7%) for 2022.
Released separately by Japan’s Ministry of Finance, the trade balance showed a surplus of Â¥0.48 trillion in December, down from Â¥0.55 trillion in November. That was a surprise to economists who were expecting an increase to Â¥0.70 trillion.
USD/JPY traded at 103.57 as of 17:07 GMT today after opening at 103.53 and falling to the session low of 103.33. EUR/JPY rallied from 125.32 to 125.75, and its daily high was at 125.97. GBP/JPY climbed from 141.33 to 142.07.
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Original from: www.earnforex.com