As it was predicted, the Bank of Japan left its monetary policy unchanged.
The key interest rate remained at its low of 0 to 0.1%. No new stimulating measures were implemented.
The central bank is sure of that the Japanese economy will start to recover in the nearest future, as the Greek issue still withholds it from gathering pace.
It is the assumption about Greece leaving the Eurozone, that exerts negative influence on the economy of Japan. Investors direct funds to reliable assets. And the Japanese yen is traditionally considered as a safe-haven currency. This is well proven by the fact that even with no new monetary stimulating implemented, the national debt growing higher, and the credit rating downgraded, the investors continue buying into the yen.
Thus during the trading session on Wednesday the yen – euro pair ascended by 120 pips to 99.6 yen per euro.
The increasing demand for the yen appreciates export prices, thus making the goods produced for foreign markets noncompetitive. In such a way the country suffers from a historic decline in the trade balance.