Japanese Interest Rates Remain Steady Weakening Yen Further

On Friday, the Japanese yen depreciated to over 156 against the U.S. dollar following the decision by the Bank of Japan to maintain its benchmark interest rate.

As anticipated, the BOJ retained its benchmark policy rate at 0%-0.1% and reaffirmed its commitment to conducting bond purchases by the March decision.

In response to this announcement, the yen experienced fresh lows, touching 156.79 against the U.S. dollar during afternoon trading.

Tokyo’s headline inflation rate for April revealed a slowdown to 1.8% from March’s 2.6%. Additionally, core inflation in the capital, which excludes prices of fresh food, notably declined to 1.6% from the previous month’s 2.4%, falling short of economists’ expectations of 2.2%.

Japanese Interest Rates Remain Steady Weakening Yen Further
Data on inflation in Tokyo is widely regarded as a leading indicator of nationwide trends. (Credits: Bank of Japan)

Data on inflation in Tokyo is widely regarded as a leading indicator of nationwide trends.

In the stock markets, Japan’s Nikkei 225 climbed 0.81% to close at 37,934.76, while the Topix rose 0.86%, ending at 2,686.48. Hong Kong’s Hang Seng index led gains in Asia, increasing by 2.12%, while mainland China’s CSI 300 advanced by 1.53% to 3,584.27.

South Korea’s Kospi closed up 1.05% at 2,656.33, whereas the small-cap Kosdaq saw a more modest gain of 0.42% to 856.82. However, Australia’s S&P/ASX 200 experienced a decline of 1.39%, closing at 7,575.9, weighed down by industrial and health services stocks.

In the U.S., stocks faced a downturn following the release of data indicating a significant deceleration in economic growth alongside persistent inflation.

Kazuo Ueda (Credits: Akio Kon/Bloomberg)

According to the Bureau of Economic Analysis, U.S. gross domestic product expanded by 1.6% in the first quarter, falling short of economists’ expectations of 2.4%.

Additionally, the report highlighted a notable increase in the personal consumption expenditures price index, rising at a pace of 3.4%, well above the previous quarter’s 1.8% advance.

In response, the Dow Jones Industrial Average declined by 0.98%, driven by steep losses in Caterpillar and IBM. The S&P 500 dropped by 0.46%, while the Nasdaq Composite lost 0.64%.

Josh Alba
Josh Alba
Josh Alba stands at the forefront of contemporary business journalism, his words weaving narratives that illuminate the intricate workings of the corporate world. With a keen eye for detail and a penchant for uncovering the underlying stories behind financial trends, Josh has established himself as a trusted authority in business writing. Drawing from his wealth of experience and relentless pursuit of truth, Josh delivers insights that resonate with readers across industries.
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