Yen jumps sharply after BoJ let monetary policies unchanged. The policy board maintained the target of annual monetary base expansion at JPY 80T by 8-1 vote. Interest rate was held at -0.1% by 7-2 vote. The central bank in the statement that "Japan's economy has continued its moderate recovery trend, although exports and productions have been sluggish due mainly to the effects of slowdown in emerging economies." And it expected sluggishness to remain in export and production. Regarding inflation, BOJ noted that year-on-year rate of CPI change is "likely to be slightly negative or about 0 percent" fort the time being. But "underlying trend in inflation steadily rises, accelerate toward 2 percent". And, BoJ left the option open for additional easing in "quantity, quality and the interest rate" if necessary.
Dollar is relatively steady against other major currencies, except against yen, after Fed left federal funds rate unchanged at 0.25-0.50% overnight. Fed also released the updated economic projections. The latest "dot plot" showed policy makers expecting 2 rate hikes this year, unchanged from March projections. However, they're expecting fed funds rates to be at 1.6% by the end of 2017, meaning just two more hikes. That compares to March projection of 1.9% by the end of 2017, nearly 4 more rate hikes. Nonetheless, policymakers expect fed fund rates to reach 2.4% by the end of 2018, meaning another 3-4 rate hikes, not too far from prior projections. In the post meeting press conference, Fed chair Yellen said that Brexit was "one of the factors that factored into today's decision.' And, Brexit "could have consequences in turn for the US economic outlook." Meanwhile, she noted that "it's not impossible by July" to see the data needed for a rate hike.
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There will be two more central bank meetings scheduled for today, including SNB and BoE. Both are expected to keep policies unchanged. On the data front, New Zealand GDP rose 0.7% qoq in Q1 versus expectation of 0.5% qoq. Australia employment rose 17.9k in May versus expectation of 16.5k. Unemployment rate was unchanged at 5.7%. UK will release retail sales while Eurozone will release CPI final in European session. CPI, Philly Fed survey, jobless claims and NAHB housing market index will be release in US session.