The historic move marks the end of eight years of massive monetary stimulus and other unconventional approaches, following a two-day meeting. Meanwhile, the strength of the dollar takes the euro and the pound sterling to two-week lows.
The yen is experiencing a drop this Tuesday after The Bank of Japan has made a momentous, but widely anticipated, decisionby ending its negative interest rate policy.
This historic measure marks the end of eight years of massive monetary stimulus and other unconventional approaches, after a two-day meeting.
The Japanese currency loses up to 1%, exceeding 150 units per dollar after the announcement, with most investors having already discounted the change. In its last quote, the yen stands at 150.55 units per dollar, while against the euro it lost 0.7%, reaching 163.22 units, close to its minimum in three weeks.
Bart Wakabayashi, head of State Street’s Tokyo branch, comments: “It’s the classic ‘buy the rumour, sell the news’. I don’t think the Bank of Japan has opted for the shock strategy this time.”
Dollar: what data the market expects
The attention of the currency market is focused this week on the decisions of central banks, led by the Federal Reserve. Fed expected to keep rates steady in Wednesday decisionalthough uncertainty persists about the indications it may make on monetary policy until 2025.
The dollar index, which compares the greenback to a basket of six major currencies, advances 0.35% to reach 103.94 unitsapproaching its highest level in two weeks.
Dollar strength pushes euro and sterling to two-week lows. The euro fell 0.2%, standing at $1.0846, while the pound fell 0.4% to $1.2684.
Source: Ambito
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