BLBG: Yen Rises After BOJ Lowers Interest Rates by Less Than Expected
By Stanley White
Oct. 31 (Bloomberg) -- The yen rose against the dollar after the Bank of Japan lowered interest rates by less than economists had forecast.
The yen also gained against the euro after the BOJ lowered its benchmark rate to 0.3 percent from 0.5 percent, compared with forecasts for a cut to 0.25 percent. The yen slumped the most since 1974 versus the dollar on Oct. 28 after the Nikkei newspaper said policy makers were leaning toward lowering rates.
``Traders have been pricing in a rate cut all this week by selling yen,'' Hiroshi Yoshida, foreign-exchange trader in Tokyo at Shinkin Central Bank, Japan's fifth-largest publicly traded lender by assets, said before the central bank's decision. ``Anything less will cause the yen to reverse course and edge higher.''
Against the dollar, the yen rose to 97.77 at 2:01 p.m. in Tokyo from 98.61 yesterday. The yen was at 125.26 versus the euro from 127.31. The euro traded at $1.2809 from $1.2915. The yen may rise to 90 per dollar next week, Yoshida said.
To contact the reporter on this story: Stanley White in Tokyo at swhite28@bloomberg.net
