Yen Slides Following BoJ Monetary Policy Meeting

(RTTNews) - The Japanese yen weakened against other major currencies in the Asian session on Tuesday, after the Bank of Japan decided to bring more flexibility to its yield curve control policy and left its short-term interest rates unchanged.

The policy board led by Governor Kazuo Ueda, decided to regard the upper bound of 1.0 percent for 10-year JGB yields as a reference in its market operations.

The bank dropped the wording that the 10-year JGB yields will fluctuate between plus and minus 0.5 percentage points from the target level.

The BoJ board decided to retain a negative interest rate of 0.1 percent on current accounts that financial institutions maintain at the central bank.

In economic news, data from the Ministry of Internal Affairs and Communications showed that Japan posted a seasonally adjusted unemployment rate of 2.6 percent in September. That was in line with expectations and down from 2.7 percent in August.

Data from the Ministry of Economy, Trade and Industry showed that industrial output in Japan was up a seasonally adjusted 0.2 percent on month in September, well shy of forecasts for an increase of 2.5 percent following the 0.7 percent decline in August.

On a yearly basis, industrial production sank 4.6 percent after dropping 4.4 percent in the previous month.

The METI also said that the value of retail sales in Japan climbed 5.8 percent on year in September, coming in at 13.357 trillion yen. That missed expectations for an increase of 5.9 percent and was down from 7.0 percent in August.

On a seasonally adjusted monthly basis, sales eased 0.1 percent after rising 0.2 percent in August.

In the Asian trading today, the yen fell to a 1-week low of 159.23 against the euro, from yesterday's closing value of 158.24. The yen may test support near the 160.00 region.

Against the pound, the U.S. dollar and the Swiss franc, the yen dropped to 4-day lows of 182.52, 150.29 and 166.58 from Monday's closing quotes of 181.42, 149.10 and 165.26, respectively. If the yen extends its downtrend, it is likely to find support around 185.00 against the pound, 151.00 against the greenback and 169.00 against the franc.

Against the New Zealand and the Canadian dollars, the yen slipped to 4-day lows of 87.60 and 108.55 from yesterday's closing quotes of 87.09 and 107.83, respectively. The next possible downside target for the yen is seen around 89.00 against the kiwi and 110.00 against the loonie.

The yen edged down to 95.41 against the Australian dollar, from yesterday's closing value of 95.04. On the downside, 97.00 is seen as the next support level for the yen.

Looking ahead, German retail sales data, import and export prices for September, Switzerland retail sales data for September, Eurozone inflation data for October are due to be released in the European session.

In the New York session, Canada GDP data for August, U.S. employment cost data for the third quarter, U.S. Redbook report, U.S. S&P Case-Shiller home price index for August, U.S. Chicago PMI for August, U.S. CB consumer confidence for October and U.S. Dallas Fed services index for October are set to be published.