The Japanese yen fell today after the Bank of Japan released minutes of its August meeting. The yen fell even against such currencies as the euro and the Great Britain pound, against which it was rallying last week.
The minutes revealed that policy makers are still aiming at 2 percent inflation but they discussed necessity to watch various indicators to gauge underlying trend:
Members expressed the recognition that, even though monthly figures for the CPI (all items less fresh food) tended to draw attention in terms of the Bank’s conduct of monetary policy, it was important to accurately gauge the underlying trend in prices.
The minutes added:
On this basis, members reaffirmed that, in assessing price developments, it was important to continue to examine a range of price indicators, and that it was also necessary to assess such developments in combination with economic developments behind the price indicators.
Some market analysts argued that such comments mean that the officials are not really convinced by the indicators that show accelerating growth of consumer prices.
It is important to note that the BoJ, unlike most central banks, does not release minutes of its most recent meeting, but the one before the last, meaning that the release is somewhat old news and does not necessarily reflect the current opinion of the Board members. Traders still pay attention to the report as it may provide hints on future actions of the central bank.
USD/JPY rose from 106.02 to 106.23 as of 6:24 GMT today, reaching the high of 106.34 intraday — the strongest rate since October 2008. EUR/JPY went up from 136.72 to 136.88. GBP/JPY edged higher from 170.34 to 170.92.
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