Investing.com — The Japanese yen weakened above the significant level of 155 against the U.S. dollar on Thursday after the country’s central bank kept interest rates unchanged.
The Bank of Japan kept its interest rate unchanged at 0.25% as policymakers remained cautious about Japan’s economic prospects and the path of inflation.
The yen weakened against the US dollar with the pair, which measures the amount of yen needed to buy one dollar, rising 0.3% to 155.36 yen, the highest level since November 21. The pair was up 0.9% on Wednesday after aggressive signals from the US dollar. Federal Reserve.
Currency strategists are closely watching the 155 level of the dollar-yen pair and see it as a potential tipping point for verbal intervention by Japanese authorities. A further decline in the yen could strengthen calls for the BOJ to consider a rate hike.
Markets were divided ahead of Thursday’s decision, as some analysts expected a 25 basis point increase on recent indications of rising inflation in Japan. Expectations about an interest rate increase had decreased in recent weeks.
The focus was now on 0630 GMT to explain the policy decision.
Analysts expect the central bank will likely raise interest rates in the coming months, with a rate hike as early as January or March.
Earlier in the global day, the US Federal Reserve cut interest rates by 25 basis points, but announced a slower pace of rate cuts next year.
Trading in Asia rose 0.1% on Thursday and was at the highest point in more than two years.