BoJ Refrains from Stimulus, Yen Unable to Keep Gains

The Japanese yen rallied today after the Bank of Japan refrained from adding monetary stimulus during its monetary policy meeting. The currency reversed its move later, giving away most of its gains versus the US dollar and the Great Britain pound and erasing the rally against the euro completely.
The BoJ left the monetary policy the same, saying in the statement:

The Bank of Japan will conduct money market operations so that the monetary base will increase at an annual pace of about 60–70 trillion yen.

The central bank was relatively optimistic in its outlook for economic growth and inflation. It said:

From fiscal 2014 through fiscal 2016, Japan’s economy is likely to continue growing at a pace above its potential as a trend, while it will be affected by the front-loaded increase and subsequent decline in demand prior to and after the two rounds of consumption tax hikes.

As for growth of consumer prices, the bank stated:

The year-on-year rate of increase in the consumer price index (CPI, for all items less fresh food and excluding the direct effects of the consumption tax hikes) is likely to be around 1¼ percent for some time, follow a rising trend again from the second half of this fiscal year, and reach around 2 percent around the middle of the projection period.

All in all, the news was positive for the yen and spurred the rally, which the currency was unable to maintain.
USD/JPY traded at 102.54 as of 11:16 GMT today after falling from 102.62 to 102.27 earlier. EUR/JPY was at 141.96 following the drop from 141.75 to 141.11. GBP/JPY traded near 172.42 after the fall from 172.69 to 171.92.

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