Bank of Japan holds interest rates as GDP grows less than expected

Story link: Bank of Japan holds interest rates as GDP grows less than expected

The yen was weaker on Thursday after new data showed that Japan’s gross domestic product was up at an annualized rate of just 2.4 percent in the first quarter, below the 2.7 percent rise that had been expected. At the same time, the Bank of Japan decided to leave interest rates at 0.5 percent for the time being.

While the governor of the Bank said that rates could go up even if consumer prices fall, analysts don’t believe that there will be any rate rises until at least after elections for the Upper House in July. Other analysts don’t believe there will be any change in rates in Japan until at least November.

The Japanese currency dropped 0.1 percent against both the US dollar and sterling, to ¥120.93 and ¥239.20 respectively, while it fell 0.3 percent against the euro to ¥163.75. Meanwhile, the yen also dropped 0.3 percent to ¥88.70 versus the New Zealand dollar and was down 0.4 percent to ¥99.81 in relation to the Australian dollar.