TOKYO: The pound built on the previous day’s gains in Asia Friday after the Bank of England surprised markets by holding fire on an interest rate cut at its first meeting since Britain voted to leave the European Union.
Many had expected a move to counter the fallout from the shock vote last month, and after Bank chief Mark Carney hinted more easing was in store.
However, the central bank signalled a possible August cut.”The precise size and nature of any stimulatory measures will be determined” next month, BoE policymakers said.
In Tokyo, sterling rose to $1.3469 from $1.3344 in New York where it had jumped 1.5 percent immediately after the Bank decision.
Speculation of more stimulus from Japan’s government and central bank pushed the yen lower.
The greenback jumped to 106.22 yen from 105.44 yen in New York, returning to levels seen before the British vote pushed the yen soaring as investors sought out safe assets.
“Anticipation of a massive stimulus package continues to drive investor sentiment and the ensuing divergence in monetary policy between the Federal Reserve and BoJ continues to weigh on the yen,” said Stephen Innes, senior trader at OANDA Asia Pacific.
