Yen Climbs as BoJ Refrains from Adding Stimulus

The Japanese yen climbed against its major rivals today as the Bank of Japan made no changes to monetary policy, refraining from expanding already extensive monetary stimulus.
The BoJ kept its monetary policy the same at today’s meeting, leaving interest rates near zero and the asset purchase program at ¥80 trillion. It was a bit of a surprise to some market participants who were anticipating additional stimulus.
At the same time, the central bank trimmed its growth and inflation projections for 2015 and 2016 (though the outlook for 2017 remained unchanged). The bank explained:

Comparing the current projections with the previous ones, the projected growth rate for fiscal 2015 is lower due to the flattening of exports against the background of the slowdown in emerging economies and to the sluggishness in private consumption reflecting in part bad weather, but the projections for fiscal 2016 and 2017 are more or less unchanged. The projected rates of increase in prices for fiscal 2015 and 2016 are lower due mainly to the effects of the decline in crude oil prices, but the projection for fiscal 2017 is more or less unchanged.

The less optimistic forecast means that monetary easing remains a definite possibility sometime in the future.
USD/JPY tumbled from 121.05 to 120.35 as of 10:55 GMT today. EUR/JPY dropped from 132.98 to 132.51 and GBP/JPY fell from 185.34 to 184.78.

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