Dollar hit by BoJ stimulus decision
Published: 12 Jun at 9 AM
The yen is up significantly against the US dollar following the Bank of Japan’s decision not to introduce any fresh stimulus. The worry for investors is that other central banks could also decide to cut short their easy money programmes.
All eyes have been on the Federal Reserve recently to see whether its bond buying programme will be brought to an early close. The mood for investors has not been improved by concerns that the economy in China may be heading towards its second quarterly slowdown.
On Monday data was released by the world’s second largest economy indicating a fall in imports and a decline in trade growth. Investment is also weak and inflation appears to be slowing.
Having topped 100 yen recently the US dollar dropped a further 1.9 per cent to end at 96.86 yen even though the greenback had been given a boost by Standard and Poor’s decision to upgrade sovereign credit outlook from negative to stable.
The commodity markets are also down after a drop in the price of gold and oil. Spot gold is currently trading at $1,373.08 per ounce, a fall of 1 per cent and Brent crude hit $102.13 per barrel, a loss of 1.75 per cent. The Australian dollar dropped a further 3 per cent against the yen to hit 90.68.