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FOREX-Dollar slides vs yen after BOJ holds off from easing

Published 16/06/2016, 01:33 pm
© Reuters.  FOREX-Dollar slides vs yen after BOJ holds off from easing
USD/JPY
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* BOJ keeps policy steady, holds off from more stimulus

* Dollar/yen falls below 105, hits lowest since Sept 2014

* Brexit worries keep pound in check, supports yen

* Dollar on defensive after Fed scales back rate hike projections (Updates prices, adds comments)

By Masayuki Kitano

SINGAPORE, June 16 (Reuters) - The dollar slid to a 21-month low against the yen on Thursday as the yen surged after the Bank of Japan held off from expanding its monetary stimulus.

The greenback had already been under pressure after the U.S. Federal Reserve lowered its economic growth forecasts and scaled back its rate hike projections, cementing expectations that it will have to skip tightening next month, although it still signalled it was planning to raise rates twice this year. dollar came under renewed pressure against the yen after the BOJ kept its monetary policy unchanged. today's BOJ decision the view was that they wouldn't do anything, but there was also a bit of caution that they might, and that had tempered (dollar/yen) moves until the announcement," said Shinsuke Sato, head of FX trading group for Sumitomo Mitsui Banking Corporation in Tokyo.

The BOJ's decision to hold off from additional monetary easing triggered a burst of yen buying, he added.

The dollar fell to as low as 104.505 yen JPY= , its lowest level since September 2014. It last traded at 104.83 yen, down 1.1 percent on the day.

Ongoing worries that Britain may vote next week to leave the European Union weighed on sterling and helped lend support to the yen, which is seen as a safe haven in times of market stress, partly because of Japan's net creditor status.

Sterling eased 0.1 percent to $1.4185 GBP=D3 , having hit a two-month low of $1.4091 on Tuesday.

Against the yen, sterling fell 1.1 percent to 148.50 yen GBPJPY=R on trading platform EBS, its lowest level since August 2013. (Editing by Simon Cameron-Moore)

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