Yen Steady As BOJ Retains Interest Rate, Asset Purchase Program Unchanged

(RTTNews) - The Japanese yen that erased its early lows against other major currencies held steady after the Bank of Japan kept monetary policy and easing program unchanged on Tuesday.

The central bank kept its overnight call rate target unchanged at 0-0.1 percent by a unanimous vote and retained its asset-buying program at JPY 91 trillion. The central bank added stimulus for a second straight month in October.

The decision was widely expected.

BoJ also said the economy has been weakening somewhat and is expected to remain relatively weak for the time being.

The yen was under selling pressure last week as the country is moving forward for another election and the opposition party that advocates "unlimited" monetary easing is expected to defeat ruling party.

The yen is trading at 81.27 against greenback and 129.38 against the pound, reversing from early lows of 81.45 and 129.55, respectively. At yesterday's close, the yen was worth 81.42 against greenback and 129.53 against the pound.

Against the euro and the franc, the yen is quoted 86.42 and 104.00, after having fallen to early lows of 86.65 and 104.33, respectively. On Monday, the yen closed trading at 104.33 against the euro and 86.64 against the franc.

Moody's Investors Service on Monday stripped France's of its coveted triple A rating with a one notch downgrade, in yet another blow to President Francois Hollande whose popularity has been diminishing amid the country's economic gloom and rising unemployment.

The government bond rating on the Eurozone's second largest economy was cut to Aa1 from Aaa, while the rating outlook was maintained at 'negative.'

The yen is worth 66.49 against the NZ dollar, 81.57 against the loonie and 84.62 against the aussie, bouncing back from early Asian session's lows of 66.78, 81.73 and 84.81, respectively. The kiwi-yen, loonie-yen and aussie-yen pairs were worth 66.78, 81.74 and 84.80, respectively at Monday's close.

The members of the Reserve Bank of Australia's monetary policy board said that the need for an interest rate cut was outweighed by higher than expected inflation, minutes from the bank's November 6 meeting revealed today.

German producer prices and Swiss trade data for October are slated for release in the European session.

The U.S. housing starts and building permits for October, along with Canada wholesale sales for September are due in the American session.

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