Dollar-yen temporarily fell into the ¥156 range in New York trading. The impact of yen appreciation following the Bank of Japan meeting is considered limited, while expectations for a December rate hike remain. The report also touches on the impact of lower US stocks and developments at the ECB.
In today's New York foreign-exchange market, dollar-yen was sold early in the session and temporarily fell into the ¥156 range. Although dollar weakness led the move, yen appreciation also pushed dollar-yen lower, before the pair recovered part of its decline later in the session. The move may have been heavily influenced by month-end real-money flows.
Following the Bank of Japan's decision meeting, the policy rate was left unchanged, and Governor Ueda also held a press conference. The outcome was not seen as a strong driver of yen appreciation, and was understood to have provided no new clues about the timing of additional rate hikes. Some also attributed the move to the sharp decline in US stocks the previous day.
Euro-dollar came under renewed selling later in the session and fell to around $1.1135. Euro-yen remained heavy and continued to trade in the ¥175 range. The ECB's decision to forgo a rate hike and negative GDP growth in France were also seen as weighing on the market. Some market participants said the probability of a December rate hike remains priced at a high level.