Investing.com - The yen gained in Asia on Thursday after the Fed held steady as expected and regional players looked ahead to the view on policy from the Bank of Japan on Friday.
USD/JPY changed hands at 105.20, down 0.18%, while AUD/USD traded at 0.7490, down 0.01%
In a 9-1 vote, the Federal Open Market Committee (FOMC) left the target range on its benchmark Federal Funds Rate unchanged at a level between 0.25 and 0.50% on Wednesday at a two-day meeting in Washington D.C. At the same time, the FOMC only mildly suggested a rate hike could be in the offing this year.
"Near-term risks to the economic outlook have diminished," the Fed's policy-setting committee said in its statement following a two-day meeting
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last quoted at 96.75.
Ahead, a light data day in Asia with the export price index for the second quarter in Australia seen up 2.9% quarter-on-quarter, and the import price index expected to gain 1.6%.
Overnight, the dollar held steady against the other major currencies on Wednesday, after the release of downbeat U.S. data, as investors were still eyeing the Federal Reserve’s policy decision due later in the day.
The National Association of Realtors (NAR) said its pending home sales index rose by 0.2% last month, missing expectations for an increase of 1.4%. Pending home sales in May declined 3.7%.
The report came after the U.S. Commerce Department said total durable goods orders fell 4.0% last month, compared to economists' expectations for a decline of 1.1%. May's orders were revised to a decrease of 2.8% from a previously reported 2.3% decline.
Core durable goods orders, which exclude volatile transportation items, fell 0.5% last month, compared to forecasts for a 0.3% gain.
The U.K. Office for National Statistics earlier reported that gross domestic product rose 0.6% in the three months to June, above forecasts for growth of 0.4%. Year-over- year, U.K. economic growth expanded 2.2% in the second quarter, also above the forecast for an expansion of 2.0%.
But the data failed to boost optimism over the U.K. economy as it is the final measure of growth in the run-up to the U.K.’s June 23 referendum that resulted in Britain’s decision to leave the European Union.
According to a Bloomberg survey released on Wednesday, consensus expects the U.K. to contract by 0.1% in the third quarter.
The yen weakened following reports Prime Minister Shinzo Abe and his government will compile a stimulus package of nearly ¥28 trillion, or $265.3 billion, to prop up Japan's flagging economy.
That would be bigger than earlier reports of a possible headline figure of around ¥20 trillion.
Market players are also looking ahead to the Bank of Japan’s policy meeting later this week. The BOJ is widely expected to ease policy further at the conclusion of its meeting on Friday, which could include a rate cut deeper into negative territory and additional asset purchases.