(Adds comments, U.S. Treasury Monetary Report, price updates) *BoJ keeps rates on hold, yen cuts broadly *Yen expected to see first weekly gain in 3 years against euro *Yen against dollar for first time in 6 months Prices fall to lows * U.S. 1-year inflation outlook falls – Consumer sentiment survey * Major trading partners are not manipulating their currencies – Treasury Department Gertrude Chavez-Dreyfus New York, June 16 (Reuters) – The yen fell to a 15-year low against the euro on Friday after the Bank of Japan (BOJ) policy decision. ) maintained its ultra-low interest rate policy and expected inflation to slow later this year, in contrast to Thursday’s European Central Bank (ECB) rate hike. The Japanese sector also fell against the dollar, hitting the bottom for the first time in half a year. As expected by most, the Bank of Japan maintained its short-term interest rate target of -0.1% and the 0% cap on 10-year bond yields set under the Yield Curve Control (YCC) policy. Bank of Japan Governor Kazuo Ueda said he expected inflation to moderate, but said the pace of the decline was “a bit slow”. The yen fell broadly on the decision, hitting a 15-year low of 155.22 yen to the euro. It was poised for its biggest weekly drop against the euro in three years. The euro recently rose 1.1 yen to 155.16 yen. The dollar gained 1.1 percent against Japan’s currency to $141.795 after reaching its highest level since November. It was the fastest pace of increase in a single day since late April. “The Bank of Japan added fuel to the dollar’s fire today by suspending trading again,” said Eric Breger, director of currency and precious metals risk management at Silver Gold Bull in Toronto. Elsewhere, the euro was poised for its best week against the dollar since June after the ECB raised borrowing costs to a 22-year high and signaled further tightening. That and some weaker US economic data sent the dollar lower as traders reduced their bets on how much US interest rates need to rise. The euro rose more than 1% on Thursday on the rate hike and ECB forward guidance, but was flat at $1.0940 against the US dollar after hitting a five-week high earlier. ECB President Christine Lagarde said at a press conference that another rate hike in July was very likely and that the central bank still had “reasons to cover” to stem high inflation. The pound rose 0.4% to $1.2831 after rising to its highest level since April 2022 as traders expected the Bank of England to raise rates for the 13th time in a row next week. The Fed faces tough data The ECB’s policy decision comes a day after the Fed left rates on hold and halted its 10th consecutive rate hike. But the Fed also suggested it may need to raise interest rates by up to 50 basis points by the end of the year. But recent data suggest that US economic activity has slowed and inflation has cooled, casting doubt on the Fed’s still hawkish stance. Friday’s data showed lower inflation expectations, with US consumer sentiment rising to a four-month high in June. Inflation expectations one year ahead fell to 3.3% this month from 4.2% in May, according to the same survey. In afternoon trading, the dollar index rose 0.1 percent to 102.24 after falling to a five-week low on Thursday. It was the lowest weekly performance since January. “I don’t think there will be any more rate hikes after July, but the first rate cut will be in December,” said Vasili Serebriakov, a foreign exchange strategist at UBS in New York. “Inflation will be lower than the Fed’s expectations, and we believe the economy will slow significantly in the second half.” It said it had found it had not, adding that it had closed its “enhanced analysis” against Switzerland because it met only one of its three operating criteria. The foreign exchange market had little reaction to the news. ================================================== ===== Currency Bid Price at 3:45 PM (1945 GMT) Description RIC Final US Closing Percentage YTD Percentage High Bid Low Bid Last Change Session Dollar Index 102.2600 102.1400 +0.13% -1.189% +102.4200 +102.0000 EUR /USD$1.0941 $1.0946 -0.03% +2.12% +$1.0971 +$1.0918 USD/JPY 141.7650 140.3000 +1.05% +8.13% +141.8800 +139.8500 EUR/JPY 155.12 153.52 +1.04% +1 0 .56% +155.2200 +153.1000 USD/Switzerland 0.8939 0.8920 +0.23% -3.31% +0.8949 +0.8902 Sterling/USD $1.2831 $1.2783 +0.39% +6.11% +$1.2848 +$1.2771 USD/Canada 1.3192 1.3222 -0.22% -2.63% +1.3239 +1.31 78 Australia/Dollar $0.6875 $0.6883 -0.11% +0.87% +$0.6900 +$0.6856 EUR/CH 0.9778 0.9758 +0.20% -1.18% +0.9782 +0.9747 EUR/GBP 0.8526 0.8561 -0.41% -3.60% +0.8565 +0.8522 NZ $0.6232 $0. 6235 -0.03% – 1.83% +$0.6247 +$0.6211 USD/USD USD/Norway 10.5430 10.4910 +0.54% +7.48% +10.6070 +10.4810 EUR/Norway 11.5415 11.4805 +0.53% +9.99% +11.5975 +11.4708 USD/Sweden 10.6478 10.5974 +0 .59 % +2.31% +10.6588 +10.5609 EUR/ Sweden 11.6514 11.5825 +0.59 % +4.50% +11.6585 +11.5828 (Reported by Gertrude Chavez-Dreyfuss. Additional reporting by Joyce Alves from London and Rae Wee from Singapore. Editing: Sohini Goswami, Nick Zieminski, Jonathan Ortiz)
