Allied to a reduction in the number of rate rises it forecasts in 2017 and 2018, that was enough to knock the greenback to a almost 4-week low of 100.10 yen in Asian trading.
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The U.S. Federal Reserve left interest rates unchanged on Wednesday but signalled it could still tighten monetary policy by the end of this year.
The decision to stick to the easy money policy for the time being came hours after the Bank of Japan overhauled its own stimulus programme to target inflation and held off cutting interest rates further into negative territory. Earlier on Thursday, the Reserve Bank of New Zealand held steady, having already cut twice this year, lowering its policy rate to a record low of 2.0 percent.
“We’re generally pleased with how the economy is doing”, Yellen said at a news conference after the Fed’s announcement.
Shortly after the decision was announced, gold futures climbed 0.5 percent to $1,338.40 per ounce.
Federal Reserve chair Janet Yellen last night braved mounting opposition inside and outside the U.S. central bank and delayed an interest-rate increase again to give the economy more room to run.
But three members of the Fed’s 10-member policymaking committee voted to raise the benchmark rate, the largest number of dissents since December 2014.
“It is hard for the ECB to increase its purchases when PMIs point towards expansionary economic activity in the euro zone and if inflation picks up towards the end of the year”, said DZ Bank analyst Rene Albrecht.
Taken together, the decisions sent a message that “central banks remain committed to supporting growth globally”, said Anthony Karydakis, chief economic strategist at Miller Tabak.
Asian shares rose, with MSCI’s broadest index of Asia-Pacific shares outside Japan up 1.2%. That’s why the last meeting of the year in December is seen as the most likely time for the next rate hike as long as the economy keeps improving in line with the Fed’s expectations.
Japan’s top currency diplomat, Masatsugu Asakawa, vice finance minister for worldwide affairs, said on Thursday that Japanese financial authorities are watching for speculative currency market moves and would respond if needed.
Shanghai composite index rose 0.58 percent at 3,043.74 points, while CSI300 index was trading 0.78 percent higher at 3,292.87 points.
The dollar index, which tracks the greenback against a basket of six major rivals, was slightly higher at 95.456, on track to log a weekly loss of 0.7 percent.
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Elsewhere, oil and metals prices rose strongly on the back of a softer dollar, with the global Brent crude benchmark gaining $0.50 to trade at $47.32 a barrel, while copper and aluminum rose 0.5% and 0.4%, respectively. German Bund yields also fell 0.4 basis points to minus 0.088 per cent. A declining dollar and a third consecutive drawdown in US crude inventories helped boost the oil market, ahead of a meeting of major oil producers.
