Yen holds ground as BOJ leaves rates steady

Reuters

Yen holds ground as BOJ leaves rates steady

2024 10월 31 일, 오전 6:33 GMT

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Updates with prices as of 0608 GMT

By Brigid Riley

TOKYO, Oct 31 (Reuters) -The yen traded in a narrow range on Thursday after the Bank of Japan left ultra-low interest rates unchanged, while the U.S. dollar consolidated ahead of jobs data later this week and the U.S. presidential election next week.

The Japanese currency has taken a beating, down around 6% for the month as the dollar and U.S. Treasury yields have hovered around their highest since July.

Japan's political shake-up has only added to the yen's woes, heightening uncertainty about the country's fiscal and monetary policy outlook.

The BOJ stood pat on Thursday, as expected, and signalled the need to scrutinise global economic developments, highlighting its focus on risks to a fragile domestic recovery in deciding when to next tighten policy.

Traders had been concerned that the BOJ could delay rate hikes after the Japanese election upset, but there was "no such message" in the central bank's statement, helping the yen firm marginally, said Masafumi Yamamoto, chief currency strategist at Mizuho Securities in Tokyo.

The yen JPY=EBS fluctuated before gaining after the BOJ's decision. It was last up 0.38% at 152.83, keeping close to 153 per dollar.

Analysts are divided over the prospect of additional interest rate hikes by year-end, putting the focus on BOJ Governor Kazuo Ueda's post-meeting briefing for clues on the pace and timing of further increases.

JOBS, ELECTION IN FOCUS

The dollar held steady ahead of the U.S. Personal Consumption Expenditures (PCE) Price Index for September on Thursday and the closely-watched nonfarm payrolls report on Friday.

Economists polled by Reuters estimate 113,000 jobs were added in October, although the number could be lower due to recent hurricanes.

But the jobs report may find itself overshadowed in the run-up to the presidential election on Tuesday.

"A slightly hotter or slightly cooler (jobs) number to me probably doesn't change the dial too much" given the upbeat trend in recent economic data, said IG Market Analyst Tony Sycamore.

"It makes sense to me to be ... taking some risk off and moving to the sidelines" ahead of a week that will "set the tone for the end of the year," he said.

Some investors have been putting on trades betting Republican candidate Donald Trump will win, helping to lift the greenback and U.S. Treasury yields, although he is still neck and neck with Vice President Kamala Harris in several polls.

The dollar index =USD, which measures the currency against six major rivals, was flat at 104.1. It is set for its biggest monthly gains against peers since April 2022.

The euro EUR=EBS edged down 0.03% to $1.0852 after rising as high as $1.0871 on Wednesday.

Sterling GBP=D3 stood at $1.2956, down 0.04% so far on the day.

Elsewhere, the Australian dollar AUD=D3 slid 0.05% to $0.65749 after domestic retail sales numbers for September missed estimates, inching up just 0.1%. Analysts had looked for a gain of 0.3% in September.

The New Zealand dollar NZD=D3 ticked up 0.1% to $0.5978.

Markets also got economic data from China on Thursday, with the National Statistics Bureau's manufacturing PMI showing activity in October expanded for the first time in six months.

The offshore yuan CNH=D3 held steady to trade at 7.1293.

In cryptocurrencies, leading token bitcoin BTC= last fetched about $72,246, after pushing as high as $73,609.88 on Tuesday.

World FX rates https://tmsnrt.rs/2RBWI5E

Reporting by Brigid Riley; Editing by Christopher Cushing and Jacqueline Wong

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