2018.09.1902:30:00UTC+00Yen Declines After BoJ Keeps Policy Unchanged

The Japanese yen slipped against its key counterparts in the Asian session on Wednesday, after the Bank of Japan put its ultra-loose monetary policy on hold and affirmed to maintain low rate regime for "an extended period."

The policy board of the BoJ decided to purchase government bonds so that the yield of 10-year JGBs will remain at around zero percent.

The board retained the -0.1 percent interest rate on current accounts that financial institutions maintain at the bank.

The BoJ will conduct purchases of Japanese government bonds in a flexible manner so that the outstanding amount will increase at an annual pace of about JPY 80 trillion.

Regarding economic outlook, the bank said Japan's economy is likely to continue to expand moderately.

Data from the Ministry of Finance showed that Japan recorded a 444.594 billion yen trade deficit in August. That beat forecasts for a shortfall of 483.2 billion yen following the 231.9 billion yen deficit in July.

The currency was lower on Tuesday. It dropped 0.5 percent against the greenback, 0.4 percent against the pound and 0.3 percent against both the franc and the euro for the day.

The yen depreciated 0.07 percent to 112.43 against the greenback, a level unseen since July 20. The pair had ended Tuesday's trading at 112.35. Any further downtrend may take the yen to a support around the 115.00 level.

The yen pared gains to 116.58 against the franc, from a high of 116.36 touched at 10:15 pm ET. The next possible support for the yen is seen around the 118.00 level. Pulling away from a high of 130.92 hit at 9:55 pm ET, the yen edged down to 131.25 against the euro. On the downside, 133.00 is possibly seen as the next support level for the yen.

The yen fell back to 147.90 against the pound, not far from a 2-month low of 148.02 hit at 6:30 pm ET. The yen is likely to test support around the 150.00 level if it drops further.

The yen lost 0.1 percent to a 4-month low of 86.70 against the loonie, compared to 86.59 it hit late New York Tuesday. The yen is poised to find support around the 88.00 region.

The yen weakened to near a 3-week low of 81.51 against the aussie, down 0.6 percent from a high of 81.02 seen at 9:55 pm ET. The aussie-yen pair was valued at 81.11 when it ended deals on Tuesday. Continuation of the yen's downtrend is likely to see it challenging support around the 83.00 level.

After rising to 73.82 against the kiwi at 10:05 pm ET, the yen reversed direction and fell as low as 74.12. The yen ended yesterday's trading at 73.95 against the kiwi. Next key support for the yen is seen around the 75.00 level.

Data from Statistics New Zealand showed that New Zealand's seasonally adjusted current account deficit fell to NZ$2.7 billion for the June 2018 quarter.

The NZ$484-million decrease from the March 2018 quarter was mainly driven by rising exports of goods and services.

Looking ahead, Eurozone current account and construction output for July, U.K. house price index for July, CPI and PPI for August are due in the European session.

In the New York session, U.S. housing starts and building permits for August are scheduled for release.

At 9:00 am ET, the European Central Bank President Mario Draghi speaks at an event hosted by the Jacques Delors Institute, in Berlin.