USD/JPY felt 2.13% to 103.75, the lowest level since August 2014 after Bank of Japan left monetary policy remained on hold at the conclusion of its two-day meeting on Thursday.
The BOJ board voted to continue expanding the monetary base at an annual rate of about ¥80 billion. The BoJ officials also flagged the EU referendum on June 23 as a key geopolitical threat to the Japanese economy, along with the “European debt problem”. This decision was a result of the fact that the Federal Reserve also cited the referendum as a factor in its decision on Wednesday to keep interest rates on hold.
The dollar had already weakened against the other major currencies after the Fed kept rates unchanged and lowered forecast for how much they expect to hike interest rates in the next few years.
The dollar was little changed against the single currency, with EUR/USD at 1.1263.
The euro was precipitously lower against stronger yen, with EUR/JPY down 1.99% at 116.99, the weakest level since January 2013.
The pound was also lower ahead of the Bank of England’s latest interest rate announcement later on Thursday. Expectations remain low for changes to monetary policy. However the meeting minutes could contain a fresh warning about the risks posed by next week’s referendum.
The sterling pound dropped against the greenback, with GBP/USD down 0.36% at 1.4153, while EUR/GBP advanced 0.44% at 0.7960. Sterling tumbled more than 2% against the Japanese yen, with GBP/JPY dropping 2.35% to 147.09, the lowest level since April 2013.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.23% at 94.45.