(Reuters) – The Financial institution of Japan saved rates of interest unchanged on Friday however mentioned it will trim bond shopping for sooner or later to permit long-term rates of interest to maneuver extra.

On the finish of its two-day coverage assembly, the central financial institution mentioned it will proceed to purchase authorities bonds on the present tempo. However it determined to come back up with a selected plan to trim purchases for the subsequent one to 2 years, at a subsequent policy-setting assembly in July.

Yields on authorities bonds fell on the information, whereas the yen hit one-month lows towards the greenback.

QUOTES:

TAKAYUKI MIYAJIMA, SENIOR ECONOMIST AT SONY FINANCIAL GROUP, TOKYO

“Today’s decision suggests that the BOJ is very careful about reducing the bond buying amounts, which means the central bank is also cautious about raising rates. It has become less likely that the BOJ will raise rates in July.”

CHRISTOPHER WONG, CURRENCY STRATEGIST, OCBC, SINGAPORE

“JPY suffers after BOJ was perceived to be in no hurry to normalise policies. It is likely that may challenge previous high at 160 and that should see heightened risks of intervention. But intervention is at best an option to slow the pace of depreciation and not a tool to reverse the trend.

“For USD/JPY to show decrease extra meaningfully it will require the kindness of the dollar or for BOJ to sign an intent to normalise urgently. None of this appears to occur and the trail of least resistance for USD/JPY is to the upside.”

HIROFUMI SUZUKI, CHIEF FX STRATEGIST, SMBC, TOKYO

“It is a surprise that no decision was made on the reduction of bond purchases this time. At the next meeting, the BOJ said it would decide on a specific plan for the next one to two years. Therefore, it is considered that the result was somewhat dovish. For the FX market, this is likely to be a cause of the yen’s depreciation.”