Yen well down after BoJ policy announcement
City Index April 5, 2013 3:15 PM
<p>After the Bank of Japan announced radical monetary stimulus measures, the country’s currency fell significantly in forex markets.</p>
The yen weakened to a three-and-a-half year low today (April 5th) after suffering its sharpest decline since 2008 following yesterday's surprise radical policy decision announced by the Bank of Japan (BoJ).
Reaching its highest level since August 2009, the dollar rose to 97.2 yen, before retreating somewhat to 96.38 yen as of 09:30 BST.
After his first policy meeting since being appointed governor of the BoJ, Haruhiko Kuroda announced aggressive stimulus measures, including plans to inject $1.4 trillion (£920 billion) into the Japanese economy over the next two years.
Bill Diviney, currency strategist at Barclays Capital, told Reuters: "They've committed to expanding the monetary base at quite a significant pace, which has had a very big impact on the market."
Under the proposals, the BoJ will purchase around $73 billion in bonds every month – which is the equivalent of 1.4 per cent of the country's GDP. In comparison, the US Federal Reserve purchases bonds worth 0.6 per cent of GDP each month.
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