source:
http://www.forexhelp.com/news-1184216416-c0031008-06276
Forex - US dollar gains vs yen after Bank of Japan leaves key rate unchanged
SYDNEY (Thomson Financial) - The US dollar strengthened against the yen after the Bank of Japan on Thursday kept its overnight call rate target unchanged at 0.5 percent for the sixth straight meeting, as widely expected by the market.
http://www.forexhelp.com/news-1184205642-c0031008-02680
At 2.17 pm (0417 GMT) in Sydney, the dollar was trading at 122.35 yen, up from 122.29 yen in early Asia trading, while the euro was at 1.3754 dollars, up from 1.3748 earlier.
The Japanese central bank said the vote by its nine-member policy board was eight to one, with Atsushi Mizuno voting against the proposal by BoJ governor Toshihiko Fukui to leave the overnight call rate at the current level.
"The BoJ's decision and the vote were largely as expected by the market, including Mr Mizuno's dissenting vote," said Mitsuru Sahara, a senior manager at Bank of Tokyo-Mitsubishi UFJ.
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Currency markets are now awaiting Fukui's speech which is due to begin at 3:30 pm Tokyo time (0630 GMT).
Sahasa said unless the BoJ governor indicates that a rate hike in Japan is unlikely next month, then the currency market will not likely be affected too much by his remarks.
He said the market is currently looking at a 70-80 percent chance of a rate increase in Japan in August. The BoJ's next policy meeting is on August 22-23.
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Elsewhere in Asia, traders will again find themselves short of key data releases for the second consecutive night and range trading will likely dominate into Friday.
NAB Capital strategists said carry trades are likely to remain supported following the BoJ's decision.
"With no change in the glacial pace of interest rate increases, it's hard to see why Japanese investors won't continue to invest abroad in high-yielding currencies such as the Australian dollar," they said.
CMC Markets chief analyst Ashraf Laidi said the US dollar/yen currency pair could stabilize around the 122.10 yen level if US equity markets continue their recovery from this week's earlier sell-off.
http://www.forexhelp.com/news-1184173669-c0031008-46709
But he said the greenback's weakness is becoming more structural in nature, suggesting renewed losses down to 121.60 yen and possibly further to 121.20 yen. Key support for the US dollar remains at 120.75 yen, he said.
Laidi said that while a rebound in US equities should boost the euro on rising risk appetite, a decline in US equities may not be as negative for the euro as proven in previous episodes.
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"Traders must also watch the price of gold. If we see a decline in equities accompanied with rising gold, then this reflects a sign of reduced risk appetite coupled with overall dollar weakness from subprime (lending) woes," he said.
http://www.forexhelp.com/news-1184173304-c0031008-46481
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