USD/JPY rises after BoJ rate decision
The Bank of Japan left its interest rate stable today, at 0.3%. Japan has one of the lowest rates of any developed country, joining the U.S. in what is known as ZIRP (zero interest rate policy), in which rates are set in such a way as to make them effectively 0%.
In addition to leaving the interest rate the same, the BoJ said that its assessment of the Japanese economy has improved, and that the bottom of the recession may have come in Quarter 1 of 2009. The Bank of Japan also said that it would not intervene in the FX market.
On the news, the Japanese yen retreated in currency trading against the U.S. dollar. The dollar is higher on improved risk, and the fact that forex traders no longer feel an urgent need to make safe haven investments.
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