Yen steady after BoJ interest rate decision
Friday, 13 July 2007
TOKYO, July 12 (AFP): The yen barely moved in Asian trade today as the market took in its stride a widely expected decision by the Bank of Japan to leave its benchmark interest rate on hold at 0.5 per cent, dealers said.
They said worries about the spreading impact of US mortgage problems weighed on the dollar, which hovered just above its record low against the euro. The dollar eased to 122.30 yen in Tokyo afternoon trade, down slightly from 122.45 in New York late Wednesday but little changed from shortly before the BoJ decision.
The euro firmed to 1.3759 dollars from 1.3741 while holding steady at 168.27 yen after 168.28.
The BoJ provided no surprises with a decision to leave its benchmark lending rate on hold for a sixth straight meeting.
One policy board member opposed the decision but markets had expected a split vote.
Many players expect a rate hike in August although there is also speculation that the central bank may have to put off another move until September or even later if the ruling party suffers a heavy defeat in July 29 elections.
The government of Prime Minister Shinzo Abe, whose popularity has been battered by a series of scandals involving cabinet ministers, opposes another interest rate hike at this point given lingering deflation.
The market was waiting for remarks from BoJ governor Toshihiko Fukui at a press conference later Thursday for hints on when the next rate rise will come.
Players remained wary about prospects for the US economy in light of the current problems in sub-prime mortgages taken out by higher-risk borrowers.
The dollar firmed to 9,023 Indonesian rupiah in late Asian trade from 8,995 on Wednesday and to 919.10 South Korean won from 918.90.
It eased to 45.87 Philippine pesos from 45.89 and to 32.78 Taiwan dollars from 32.85.
They said worries about the spreading impact of US mortgage problems weighed on the dollar, which hovered just above its record low against the euro. The dollar eased to 122.30 yen in Tokyo afternoon trade, down slightly from 122.45 in New York late Wednesday but little changed from shortly before the BoJ decision.
The euro firmed to 1.3759 dollars from 1.3741 while holding steady at 168.27 yen after 168.28.
The BoJ provided no surprises with a decision to leave its benchmark lending rate on hold for a sixth straight meeting.
One policy board member opposed the decision but markets had expected a split vote.
Many players expect a rate hike in August although there is also speculation that the central bank may have to put off another move until September or even later if the ruling party suffers a heavy defeat in July 29 elections.
The government of Prime Minister Shinzo Abe, whose popularity has been battered by a series of scandals involving cabinet ministers, opposes another interest rate hike at this point given lingering deflation.
The market was waiting for remarks from BoJ governor Toshihiko Fukui at a press conference later Thursday for hints on when the next rate rise will come.
Players remained wary about prospects for the US economy in light of the current problems in sub-prime mortgages taken out by higher-risk borrowers.
The dollar firmed to 9,023 Indonesian rupiah in late Asian trade from 8,995 on Wednesday and to 919.10 South Korean won from 918.90.
It eased to 45.87 Philippine pesos from 45.89 and to 32.78 Taiwan dollars from 32.85.