Bank of Japan cuts interest rate to 0.3 percent

Bank of Japan cuts interest rate to 0.3 percent

Story link: Bank of Japan cuts interest rate to 0.3 percent

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The yen made gains after the Bank of Japan cut interest rates by 0.2 percent to 0.3 percent Friday on a mixed vote of four in favor of the cut as made, three favoring a slightly larger cut of 0.25 percent and one wanting no cut at all.

Later on in morning trade in New York, however, the yen had given back some of those gains to trade at ¥125.3714 to the euro and at ¥98.64 to the US dollar, while the Japanese currency was at ¥64.8311 to the Australian dollar and at ¥58.1 to the New Zealand dollar.

The euro was also lower versus the US currency as inflation in the Eurozone was reported to have dropped to 3.2 percent in October, from 3.6 percent in September.

The decline in inflation makes it more likely that the European Central Bank will cut interest rates, probably to 3.25 percent, in November.

At mid-morning in New York it took $1.2710 to buy a euro.

Meanwhile, the pound also weakened versus the greenback as consumer confidence declined in the UK and expectations rose that the Bank of England will cut interest rates to 4 percent, a drop of half a percentage point, when it meets next.

The pound was also hurt by Thursday’s report form Nationwide Building Society that house prices have fallen more from a year ago than they have fallen in any similar period since 1991 as it has become more difficult to obtain a loan to make a house purchase.

At around 10:30 a.m. in New York the pound traded at 79.13 to the euro while it took $1.6063 to buy a pound.