Technical analysis and trading recommendations - https://fxpcm.com/en/fx/usdjpy-pair-dropped-sharply-after-bank-japans-decision-28042016
After the Bank of Japan decided to maintain the current level of asset purchases and not to change interest rates, there was a sharp strengthening of the yen and falling stock market of Japan. The Bank of Japan kept interest rates on deposits at the level of 0.1% (this decision was taken by 7 votes to 2) and the volume of purchases of assets of 80 trillion yen per year (this decision was taken by 8 votes to 1).
This decision surprised market participants, since many of them had expected the central bank will take further measures to stimulate the national economy, as has been previously stated in the bank.
Immediately after the announcement of the Bank of Japan's decision pair USD / JPY has fallen to 2.4%, while the yen showed the biggest one-day rise since 24 August 2015.
The Japanese stock index Nikkei Stock Average on the basis of trading in Asia fell 3.6% to 16666.05 points. USD / JPY The pair returned to levels close to 18-month low reached earlier in April, around the level of 108.00, which will now act as a strong support level for the USD / JPY pair from further decline.
The Bank of Japan did not change the policy, despite the further deterioration of economic conditions in the country. The inflation data, released last week, showed that consumer prices, taking into account energy prices fell in March by 0.3%. Inflation expectations of households in the last month were the lowest in three years, and wage growth slowed.
The Bank of Japan also pushed its forecast for the achievement of the inflation target of 2% for half-year for the period from April 2017 to March 2018, changing its outlook for the fourth time this year. At the same time, as noted in the bank, the balance of risks for GDP growth is "biased downward."