The yen slumped after the Bank of Japan held its interest rates unchanged as expected at current low level of 0.5%. The dollar rallied to break resistance at 117 versus the yen, while the sterling approached 235 against the yen from below 230.
The post-meeting statement from the Bank of Japan showed an unchanged assessment of the economy, saying that the economic growth would expand moderately. The hawkish comments helped to alleviate the nervousness of recent global financial market turmoil.
Besides, the European Central Bank injected 40 billion euros to the banking system via a three-month money market operation to ease worries over credit market.
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