Yen steady after BoJ leaves rates on hold
TOKYO (AFP) — The yen was little changed in Asian trade on Thursday after the Bank of Japan left its super-low interest rates unchanged as widely expected amid worries about the economic outlook, dealers said.
The dollar was at 113.20 yen in Tokyo afternoon trade compared with 113.41 in New York late on Wednesday.
The euro was steady at 1.4372 dollars after 1.4373 dollars and lower at 162.66 yen against 163.03.
Market players were refraining from active trading ahead of the year-end holidays, said Kenichi Yumoto, vice president of the foreign exchange sales at Societe Generale.
The Singapore market was closed Thursday for a public holiday, making traders more reluctant to jump into the market, he said.
The yen did not move much after the Bank of Japan (BoJ) kept its key rate unchanged at 0.5 percent, the lowest among developed countries.
"The Japanese economy is weak, so it will be difficult for the BoJ to raise interest rates," said Mark Wan, chief analyst at Hang Seng Investment Services Ltd.
The BoJ is likely to keep rates unchanged until at least the first quarter of 2008, he said.
Investors were waiting for the release of US economic data to help them gauge where interest rates are headed there.
A final estimate of US third-quarter gross domestic product is due on Thursday, followed on Friday by the core personal consumption index, which is the Federal Reserve's preferred measure of inflation.
Yumoto at Societe Generale said there was a risk of large swings in exchange rates because of thin trading volumes.
"Rates can move easily, as seen in the fall of the pound," he said.
In New York on Wednesday the British pound slumped below the two-dollar mark for the first time since September.
Sterling lost ground as the markets moved to price in an increasing likelihood of aggressive interest rate reductions from the Bank of England, dealers said.
The minutes from the December 6 meeting of the British central bank's monetary policy committee showed that the nine-member panel voted unanimously to cut its benchmark rate by a quarter point to 5.50 percent.
The committee also discussed the possibility of cutting borrowing costs by more than a quarter point.
The British pound was trading at 1.9955 dollars in Tokyo, slightly lower than 1.9977 in New York late Wednesday.
The dollar rose against regional Asian currencies.
It firmed to 1.4614 Singapore dollars from 1.4586 Singapore dollars a day earlier, to 9,425 Indonesian rupiah from 9,395, to 30.68 Thai baht from 30.61, and to 943.50 South Korean won from 939.45.
The greenback dipped to 32.53 Taiwan dollars after 32.57 and to 41.75 Philippine pesos from 41.97.
