Yen Soft After BoJ Meeting, Domestic Data

The Japanese yen rose against the US dollar but fell versus most other currencies today following the monetary policy announcement from the Bank of Japan and the release of all industry activity data.
As was widely expected, the BoJ left its monetary policy unchanged, with the main interest rate staying at -0.1% and the size of annual asset purchases at Â¥80 trillion. Regarding the outlook for the domestic economy the central bank said:

Japan’s economy is likely to continue on a moderate expanding trend, despite being affected by the slowdown in overseas economies for the time being.

But talking about the aforementioned overseas economies the BoJ said that “downside risks” for them “are likely to be significant”. The Bank explained what risks it means:

The U.S. macroeconomic policies and their impact on global financial markets; the consequences of protectionist moves and their effects; developments in emerging and commodity-exporting economies such as China, including the effects of the two aforementioned factors; developments in global adjustments in IT-related goods; negotiations on the United Kingdom’s exit from the European Union (EU) and their effects; and geopolitical risks.

Released separately, the indices for all industry activity showed an increase by 0.9% in April following the decline by 0.3% in March. Analysts had expected a bit smaller increase of 0.7%.
USD/JPY dropped from 108.10 to 107.64 as of 12:11 GMT today. At the same time, EUR/JPY rallied from 121.35 to 121.71 and CHF/JPY gained from 108.72 to 109.23.

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