Japan keeps rates steady

The Bank of Japan decieded to leave thier target policy rates unchanged after a 6-3 vote. Current rates are .25% for o/n and .40% for the Lombard rate. This move was not totally unexpected as in recent days there has been reports out of Japanese newspapers that rates would be left the same. This being said the shorter end of the market did still hold out hope that a rate rise might occur. Therefore this morning has seen a large shift in short term forwards, toward a larger differential with U.S. dollars. The Yen also weakened considerable from a close last night of 120.61 to an opening level this morning of 121.35. Based on the 6-3 vote many analsts are now expecting the rate change to occur at the February 20-21 meeting.

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FXTRADINGIDEAS@AOL.COM