Press Release: Dollar and Yen Sold as Bank of Japan Expands Stimulus Efforts

The US Dollar and Japanese Yen fell after the Bank of Japan expanded stimulus measures and lifted risk appetite. More of the same appears likely ahead.

Talking Points

• US Dollar, Yen Fall as Bank of Japan Boosts Stimulus Efforts
• BOE Minuets Unlikely to Produce Market-Moving Revelations
• S&P 500 Futures Hint Risk-On Mood Set to Carry Forward

The US Dollar came under broad-based selling pressure as risk appetite firmed overnight, weighing on the go-to safe haven currency. The MSCI Asia Pacific regional benchmark index added 0.6 percent after the Bank of Japan opted to boost stimulus efforts. The Japanese Yen underperformed, down as much as 0.7 percent. BOJ Governor Maasaki Shirakawa and company expanded the size of the central bank’s asset purchase fund to ¥55 trillion and extended the program’s operational lifespan to the end of 2013 while downgrading their outlook for Japan’s economic growth.

Looking ahead, minutes from September’s Bank of England rate decision headline the calendar in European hours. The release is unlikely to have significant market-moving as policymakers remain in a holding pattern as they complete the latest increase in QE (due to run its course in November) as well as assess the impact of the new Funding for Loans Scheme (FLS). S&P 500 stock index futures are pointing higher, hinting the risk-on mood is likely to carry forward and keep the greenback on the defensive.

Asia Session: What Happened

Euro Session: What to Expect

Critical Levels

— Written by Ilya Spivak, Currency Strategist for Dailyfx.com

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This article was provided by DailyFX.com.