At the conclusion of its monthly policy meeting on Friday, the BoJ announced a modest increase in purchases of exchange-traded funds (ETFs), but maintained its base money target at 80 trillion yen as well as the pace of purchases for other assets.
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Indeed, the BOJ said it will conduct a thorough assessment of the effects of negative rates and its massive asset-buying program at its next rate review, suggesting that an overhaul of its policy framework may be forthcoming.
Japanese yen rallied ahead of the government’s announcement, trading at 104.44, up 0.76 per cent at 10.40 am.
Before the BOJ’s decision, many investors warned of a big chance of disappointment because markets have long expected more stimulus, making it hard for BOJ Governor Haruhiko Kuroda to spring a surprise.
The Chinese yuan CNYUSD, +0.0301% rose 0.1% versus the US dollar, paring earlier gains, to reach 6.6515 from its official Thursday closing of 6.6566.
The dollar fell USDJPY, -1.43% to ¥103.79 from Thursday’s close of ¥105.24, implying a 1.4% appreciation of the Japanese currency. Platinum was last at $1,136/1,146, up $10, and palladium rose $9 to $700/705 recently on Friday.
Japan’s Nikkei 225 closed 0.6 percent up at 16,569.27, regaining earlier losses. Oracle rose 26 cents, or 0.6 percent, to $41.19 on the news.
“ETF buying has a direct positive impact on the stock market but its decision to hold off bond buying hit the dollar-yen”.
On the Comex division of the New York Mercantile Exchange, gold for December delivery rose 0.22% to $1,344.15 a troy ounce.
Barclays shares were up 5 per cent even though first-half profits fell 21 per cent, and UBS shares were up 3 per cent despite a 14.5 per cent fall in second-quarter profit.
Wall Street shares remained near all-time highs, with tech heavyweights Alphabet and Amazon rising after the bell as their earnings beat expectations.
Other economic headwinds in the euro zone are blowing in from Italy, which is expected to fare the worst in an annual stress test of the bloc’s banks due late on Friday. The tests are expected to show capital levels are insufficient to withstand a major economic shock at the bank, which is weighed down by around 50 billion euros in bad loans.
The euro stood little changed at $1.1085.
The dollar was half a percent lower against a basket of its peers at 96.289, having hit set a 2-week low at 96.216.
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ENERGY: Benchmark U.S. crude fell 54 cents to $41.38 a barrel in electronic trading on the New York Mercantile Exchange while Brent crude, used to price global oils, was down 45 cents to $43.47 a barrel in London. Brent crude, used to price worldwide oils, gained 4 cents to $43.27 in London.
