Yen Weakens Past 155 Post BoJ Rate – Asia Market Wrap

The yen fell past 155 vs the dollar after the Bank of Japan maintained its current monetary policy settings. It stated that the wage-price cycle is intensifying.

European stock futures fell alongside Asian equities markets after the Federal Reserve signalled fewer interest-rate cuts next year. The yen sank as the Bank of Japan kept borrowing costs steady.

The Euro Stoxx 50 contracts decreased 1.6%, and an index of Asian shares fell as much as 1.7%, with benchmarks in Japan, Australia, and South Korea all down. The losses followed a drop in US stocks in the previous session, with the S&P 500 suffering its largest loss since 2001 on a Fed decision day. US stock futures remained largely unchanged.

Following the BoJ decision, the yen extended its drop past the critical level of 155 vs the dollar, and Governor Kazuo Ueda stated that he will base policy decisions on the momentum of next spring’s wage negotiations. The move comes after the Fed dropped rates by 25 basis points on Wednesday, as expected, with the median policymaker now seeing just a half-percentage point of reductions next year, half of what was expected in September.