CANBERA (dpa-AFX) - The Japanese yen strengthened against other major currencies in the Asian session on Friday, after the Bank of Japan retained its key interest rate, as widely expected amid heightened political uncertainty.
The policy board voted 7-2 to hold the uncollateralized overnight call rate to remain at around 0.5 percent, the bank said in a statement.
Previously, the BoJ had raised the benchmark rate to the current level from 0.25 percent in January.
Also, the board unanimously decided to dispose its holdings of exchange-traded funds and Japan real estate investment trusts, without destabilizing effects on the financial markets.
Further, policymakers expect economic growth to moderate, as trade and other policies lead to a slowdown in overseas economies and to a fall in domestic corporate profits.
Thereafter, Japan's economic growth is likely to rise, with overseas economies returning to a moderate growth path, the bank said.
In economic news, data from the Ministry of Internal Affairs and Communications Overall showed that the consumer prices in Japan were up 2.7 percent on year in August. That was in line with expectations and down from 3.1 percent in July.
On a seasonally adjusted monthly basis, inflation was up 0.1 percent for the second straight month.
Core CPI, which excludes the volatile costs of food, also rose an annual 2.7 percent - again matching forecasts and slowing from 3.1 percent in the previous month.
On a seasonally adjusted monthly basis, core CPI was up 0.2 percent for the second consecutive month.
In the Asian trading today, the yen rose to 2-day highs of 199.54 against the pound and 185.77 against the Swiss franc, from yesterday's closing quotes of 200.57 and 186.71, respectively. If the yen extends its uptrend, it is likely to find resistance around 197.00 against the pound and 181.00 against the franc.
Against the U.S. dollar, the euro and the Canadian dollar, the yen advanced to 147.20, 173.64 and 106.74 from yesterday's closing quotes of 147.97, 174.45 and 107.29, respectively. The next upside target for the yen is seen around 145.00 against the greenback, 171.00 against the euro and 105.00 against the loonie.
Against the Australia and the New Zealand dollars, the yen climbed to a 9-day high of 97.25 and a 3-week high of 86.49 from Thursday's closing quotes of 97.91 and 87.15, respectively. On the upside, 96.00 against the aussie and 85.00 against the kiwi are seen as the next resistance levels for the yen.
Looking ahead, Canada retail sales data for July and U.S. Baker Hughes oil rig count data are slated for release in the New York session.
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