Bank of Japan Holds Rate Steady at 0.50%

BoJ policy board left its target overnight call rate steady at 0.50% at its meeting Tuesday. The decision, by unanimous vote, had been widely expected. The BoJ maintained its assessment of the economy as "sluggish," indicating in its statement that "while carefully monitoring movement in global financial markets, we will continue to strive to maintain market stability." Though markets have generally looked for the BoJ to maintain policy on hold into next year, there has been recent speculation on potential coordinated rate cuts with other major central banks in the face of recent global financial market turmoil and the deterioration in world economic outlook.

Japanese Yen Gives Back as Asian Stocks Recover

EUR-JPY has rallied as Asian stock markets recover in response to the RBA move. The deep rate cut is seen fostering growth with carry trades supported by a growth environment. USDJPY has traded to session highs of 103.17 as short-covering picks up with resistance eyed at 103.50/60. EURUSD has rallied with highs of 1.3588 with resistance tipped at 1.3600. EURJPY cleared stops above 138.30 and above to trade to highs of 140.08 with the cross currently at 139.70. 141.00 is the next resistance on the cross. AUDUSD has even recovered from the knee-jerk sell-off and trades at 0.7243 after bouncing to a high of 0.7280. Kiwi plunged to lows of 0.6148 on the RBA rate move only to bounce to highs of 0.6368 and now trades at 0.6340. GBPUSD has rallied to highs of 1.7590, after breaking out of the 1.7400-1.7475 that contained trading earlier in Asia. USDCAD has eased to 1.0981 and session lows after the RBA rate move. All JPY crosses are at Asian session highs.

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