The Japanese Yen depreciated in today's trading session after the Bank of Japan (BOJ) kept interest rates unchanged. While other currencies fluctuated within a narrow range as investors watched the results of the trade deal between US President Donald Trump and Chinese President Xi Jinping.
Mr. Trump said he has agreed to reduce tariffs on China in exchange for Beijing resuming purchases of US soybeans, maintaining rare earth exports and increasing crackdown on illegal fentanyl trade.
The BOJ kept policy interest rates unchanged at 0.5% after a two-day policy meeting, stressing that it would continue to increase borrowing costs if the economy performed as expected.
However, investors still see the decision as cautious, with only two members of the board continuing to support the rate hike, suggesting a slow progress in monetary policy normalization.
In the press conference after the meeting, BOJ Governor Kazuo Ueda also did not disclose when the next interest rate increase could be.
That has put pressure on the Yen, sending the Japanese currency to its lowest level in more than 8 months, hovering around 153.52 JPY/USD when BOJ Governor Kazuo Ueda spoke.
The Yen also hit a record low against the Euro, at 178.39 JPY/EUR, while the British pound increased by 0.5% to 202.45 Yen.
Mr. Sim Moh Siong - currency strategist at the Bank of Singapore - commented: "The market does not expect the BOJ to raise interest rates, but it is somewhat disappointing that the number of disagreements is still only two".
"There is a clear contrast: the BOJ remains cautious about raising interest rates, while the US Federal Reserve (Fed) is cautious about cutting interest rates."
