By Sarah Turner, MarketWatch
SYDNEY (MarketWatch) — The Japanese yen climbed against the dollar on Tuesday, after the Bank of Japan kept its key rate on hold and didn’t announce more policy easing.
The dollar USDJPY -0.39% bought 81.28 yen, compared with ÂĄ81.65 in late North American trading on Monday.
The Japanese central bank Tuesday kept to its policy stance, in line with economists’ expectations, stating that it will “encourage” the uncollateralized call rate to remain at around 0.0% to 0.1%.
The central bank noted that overseas economies were still decelerating but Europe has stopped deteriorating and financial markets were generally stable.
In Japan, economic activity showed some signs of picking up but remained “more or less flat,” the central bank added.
The U.S. dollar has gained more than 6% against the yen this year, according to FactSet data. February’s surprise inflation target and fresh asset-buying plan from the Bank of Japan are playing a major part in that move.
Some economists had expected more action from the Japanese central bank on Tuesday.
“We expected the bank to ease by announcing additional Japanese government-bond purchases,” said Takuji Okubo, chief Japan economist at Societe Generale Corporate & Investment Banking, describing Tuesday’s decision as a “disappointment.”
“Today an increase in the size of asset purchases may have been sufficient to satisfy the market. However, by the time [the] BoJ meets on April 27, expectations for a monetary easing will likely grow so that a much bolder measure may be needed to engineer a positive surprise,” the economist added.
The ICE dollar index DXY +0.12% , which measures the performance of the dollar against a basket of six currencies, fell to 79.7 from 79.759 in late trading on Monday.
The euro EURUSD -0.24% traded at $1.3094 compared with $1.3116.
The British pound GBPUSD -0.41% reached $1.5882 from $1.5909.
