Forex - Yen gains as Bank of Japan holds policy steady, dissent noted

Investing.com - The yen rose sharply as the Bank of Japan kept monetary policy steady on Thursday in an 8 to 1 board vote, which followed the U.S. Federal Reserve holding steady overnight.

One board member, Takahide Kiuchi, continued to call for a cut in the amount of government bonds bought by the central bank to ¥45 trillion annually from ¥80 trillion now.

USD/JPY traded at 118.70, down 0.27%, after the decision, while AUD/USD held at 0.8000, down 0.10%.

NZD/USD traded at 0.7623, down 0.84%, after the RBNZ said it would hold the official cash rate at 3.5%, but consider a cut on demand cues.

Also in Japan, March preliminary industrial output data showed a drop of 0.3%, less than the 2.3% decline seen.

After the meeting, the BoJ plans to release the board's medium-term GDP and CPI forecasts and risk analysis through the end of fiscal 2017 in its semi-annual Outlook Report at 1500 JST (0600 GMT).

The board's median forecast for core CPI in fiscal 2015 is expected to be revised down to around 0.9% from 1.0% made in January and to around 2.1% from 2.2% for fiscal 2016. This would be followed by BoJ Governor Haruhiko Kuroda's news conference at 1530 (0630 GMT).

In Australia, the RBA's March private sector credit data rose 0.5%, matching expectations, but showing a dip in investor housing loans of a gain of 0.9% from 10.4% in February. The trade price indexes for the first quarter fell 0.2%, well below an expected gain of 2.0%.

The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, fell 0.02% to 95.29.

The Federal Reserve, as expected, kept interest rates at its current level following the conclusion of its Federal Open Market Committee meeting on Wednesday, but offered little hints on the timing of its first rate hike in nearly a decade.

In the FOMC's latest statement, all calendar references have been removed on when the Fed could begin to raise rates. Previously, the Fed indicated that it could start raising rates in June.

In March, the Fed removed a stance of "remaining patient" on policy normalization, a reference which typically indicates that it is ready to raise rates. A raft of soft economic data in recent weeks, however, has ostensibly convinced the U.S. central bank to delay lift-off. On Wednesday, the U.S. Commerce Department announced that GDP for the first quarter expanded by 0.2%, far below analysts' forecasts of 1% growth.

The Fed's acknowledgement of weakness in some sectors of the economy makes it more likely it will not be ready to raise until at least September, which kept stocks from falling further.

Earlier in the day, data showed gross domestic product expanded at an only 0.2 percent annual rate as harsh weather put off shoppers and energy companies cut spending.