The Japanese yen went through the roof on Friday after the Bank of Japan stunned the markets.
The currency was up by 2.9% at 102.23 per dollar as of 1:33 p.m. ET.
After all the speculation and hype, the BOJ ended up announcing only a small tweak to policy earlier Friday.
The bank said it would increase the size of exchange-traded funds it buys to an annual pace 6 trillion yen, up from its previous pace of 3.3 trillion yen. It left its purchases of Japanese government bonds static at an annual rate of 80 trillion yen and held its key interest rate unchanged at -0.1%.
“There’s always tomorrow,” an HSBC team led by Frederic Neumann wrote in a note. “The BOJ today offered markets a little appetizer, but the full menu of easing has been kept in the oven for another day.”
“Importantly, the BOJ said it will review the effectiveness of its policies at its upcoming meeting on 21 September,” the team added. “This may raise hopes for something punchier. But we counsel caution: to us, today’s decision suggests that the BOJ has reached the limits of its current policy framework.”
As for the rest of the world, here’s the scoreboard as of 7:37 a.m. ET:
- The US dollar index is weaker by 1.1% at 95.70 after an advance estimate of gross domestic product showed that the US economy grew by just 1.2% in the second quarter, below expectations of 2.5%. Theeurois up by 0.7% at 1.1159 against the dollar even though the preliminary flash estimate showed that euro-area gross domestic product growth slowed to 0.3% in the second quarter, down from the first quarter’s 0.6%. Year-over-year, growth was up 1.6%.TheRussian rubleis stronger by 0.8% at 66.0605 per dollar after the Central Bank of Russia held rates unchanged at 10.50%, as most were expecting.TheBritish poundis up by 0.5% at 1.3230 against the dollar.The Swiss franc is stronger by 1.1% at .9698 per dollar.