Bank of Japan stands on current monetary policy; US dollar weakens slightly

Story link: Bank of Japan stands on current monetary policy; US dollar weakens slightly

The US dollar on Wednesday began to lose the strength it gained after the minutes of the Federal Reserve’s September 20 meeting were released, in which the Fed confirmed recent statements that indicate it is more worried about inflation than it is about growth and that it would likely keep raising US interest rates.

The US dollar lost 0.2 percent to SFr1.2868 in relation to the Swiss franc, and it sat at $1.2027 versus the euro and at ¥114.34 against the yen in late European trade. The euro, meanwhile, was at ¥137.64 versus the yen.

The Bank of Japan announced that it would not change its easy monetary policy after many speculated that it would make such changes. The bank’s report after a two-day meeting said that it was modest improvements in the Japanese economy. Some analysts still expect changes in the Asian nation’s monetary policy after the new fiscal year begins, but others question when and if a chance will come after the bank’s deputy governor called the current policy “appropriate”. Analysts feel that as long as Japan’s monetary policy remains the same, it will serve to strengthen the US dollar in relation to the yen.

Sterling is still hobbled by jobs and earnings data as well as by comments from the governor of the Bank of England that UK interest rates will not be lowered soon. Sterling was up 0.4 percent to $1.7504 in relation to the US dollar, however, while it stood at £0.6862 versus the euro.

Elsewhere, the South African rand fell 0.8 percent to R6.5642 as the South African central bank is expected to keep interest rates unchanged at 7 percent.