The Japanese yen just catapulted to its strongest level in almost two years after the Bank of Japan held rates.
The yen is stronger by 1.7% at 104.23 per dollar as of 7:25 a.m. ET.
Japan’s central bank voted 7 to 2 in favour of keeping its benchmark interest rate unchanged at -0.1%. Plus, members voted 8 to 1 in favour of expanding the monetary base at an annual pace of around 80 trillion yen.
“Global financial markets have remained volatile,” the bank wrote in a statement. “Therefore, due attention still needs to be paid to the risk that an improvement in the business confidence of Japanese firms and conversion of the deflationary mindset might be delayed and that the underlying trend in inflation may be negatively affected.”
As for the rest of the world, here’s the scoreboard:
- The British pound is down by 0.7% at 1.1179 against the dollar after the Bank of England held rates at a record low of 0.50% for the 87th straight month. In its statement, the BOE warned a Brexit could impact the economy, and put pressure on the British pound. Separately, Leave surged to a 6 point lead in a survey conducted by the reputable polling firm Ipsos MORI.
- The US dollar index is stronger by 0.4% at 95.01 after the Fed left rates unchanged on Wednesday. Additionally, CPI, initial jobless claims, and Philly Fed manufacturing all cross the wires at 8:30 a.m. ET.
- The euro is down by 0.7% at 1.1188 against the dollar after eurozone CPI fell by 0.1% year-over-year for May, as was expected. However, the month-over-month reading surprised on the upside, coming in at 0.4%, above expectations for 0.3%.
- The Indonesian rupiah is down by 0.6% at 13,410.0 per dollar after Bank Indonesia cut both its reference rate and 7-day repo rate by 25 basis points each, bringing them to 6.50% and 5.25%, respectively.
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