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06.19.2017 / 07:34

Bank of Japan Maintain its Aggressive Monetary Stimulus

The Bank of Japan left policy unchanged Friday, maintaining its aggressive monetary stimulus aimed at lifting inflation, which continues to show weakness despite brighter spots elsewhere in the economy.  The central bank voted 7-2 to maintain a shorter-term interest rate at minus 0.1% and keep its 10-year Japanese government bond-yield target at around zero. The dollar traded at ¥110.73 from ¥110.93 late Thursday in North America. It swung between a low of ¥110.64 and a high of ¥111.42 throughout the session. The BOJ said it expects Japan’s economy to continue expanding, helped by easier monetary conditions and fiscal stimulus via the government, adding that inflation in the country remains in a “weakening phase.”

Meanwhile, the U.S. dollar edged lower on Friday, paring some of the strong gains it made after the Federal Reserve’s rate increase earlier this week. The widely watched ICE U.S. Dollar Index which tracks the buck against a basket of six rivals, stood at 97.15, compared with 97.484 in late North American trade on Thursday. The index is poised for a decline of 0.1% on the week. The dollar was also pressured after housing starts fell 5.5% in May, dropping to their lowest level in eight months. The British pound traded at $1.2791, up from $1.2758 late Thursday, a move of 0.3%. In that session, the pound seesawed after the Bank of England left interest rates unchanged, but saw three members of the monetary policy committee (MPC) vote in favor of a rate rise. The euro traded at $1.1194 from $1.1144 in late North American trading on Thursday.