Yen in tight range before BOJ decision, markets await Fed and ECB

Yen in tight range before BOJ decision, markets await Fed and ECB

27 Apr 2020 09:17 AM

The yen was hemmed into a tight range on Monday before a Bank of Japan meeting where policymakers may consider scrapping limits on bond purchases and easing funding for companies hit by the coronavirus crisis.

Currency traders are also focused on a U.S. Federal Reserve meeting ending Wednesday and a European Central Bank (ECB) meeting Thursday as major central banks once again take the stage as the global economy battles against a deep depression.

The stakes are higher for the euro, because the ECB is likely to extend its debt purchases to include junk bonds, and some investors are worried this decision could widen rifts between members of the European Union.

The yen held steady at 107.41 per dollar on Monday in Asia. The BOJ is expected to leave unchanged its main policy targets of guiding short-term rates to -0.1% and keeping the 10-year bond yield around zero.

Japan, like most major economies, has urged businesses to close and encouraged people to stay at home to curb to slow coronavirus infections, which is causing a widespread downturn.

The euro was little changed at $1.0825 in Asia on Monday. Against the pound the euro traded at 87.47 pence. The ECB is under more pressure to act after EU policymakers last week failed to reach a consensus on the details of a 1 trillion euro emergency fund.