The US dollar was trading lower against the Japanese yen this afternoon as market sentiment is dominated by fears that the Greek debt crisis in Europe has spread to larger economies, prompting a move in safe-haven currencies such as the Japanese yen.
Today, currency markets had a muted reaction to the Bank of Japan’s widely expected decision to maintain its policy interest rate range. The central bank was also more upbeat in its overall economic assessment and did say that economic activity was picking up, and that exports and domestic demand were turning around. However, it cut its economic growth GDP estimate for the fiscal year. Later tonight, the FOMC in the US will release minutes from their latest meeting, which will likely lead to some volatility in trading between the pair, as the minutes are expected to show the US economy is faltering.
Tomorrow morning should also see some volatile trading as Japan will release data on industrial production, which is expected to have increased month-on-month in May. In the afternoon, the USD/JPY pair was trading 0.82% lower at 80.3034.