The euro rose to hit a day's high against the dollar on Thursday, after European Central Bank chief Mario Draghi said only that the bank would take time to reassess any changes in the economic outlook. The ECB earlier as expected kept interest rates unchanged at record lows but there was no hint in Draghi's comments or the bank's post-meeting statement that it is set on easing policy further in September to support growth.
Some investors had speculated that in response to last month's vote by Britain to leave the European Union, the bank would signal more stimulus was imminent. The euro rose to $1.1060, up 0.35 percent on the day. "The euro has squeezed higher as Draghi offered no surprise and no strong sense of urgency," said a trader in a North American bank. Italian government bond yields rose to a three-week high while German yields fell after Draghi said no attention was given to specific instruments.
Media reports in the run up to the meeting had said the ECB was considering changing the country mix of its quantitative easing programme to skew purchases towards Italy. The yen rebounded from six-week lows against the dollar on Thursday, after Bank of Japan chief Haruhiko Kuroda said the bank saw no need to stimulate the economy with "helicopter money". After dipping below $1.10 on Wednesday, the euro was also steadier as the European Central Bank held off with any immediate further easing of monetary policy, as expected.
Investors had been betting on an aggressive round of stimulus from next week's Bank of Japan meeting, but Kuroda played down the idea of injecting cash directly to businesses and consumers in an interview with BBC Radio 4. "The comments suggesting that there is no need for helicopter money have sent the Japanese Yen soaring," said David Cheetham, a market analyst with online broker XTB Markets in London.
"It appears rather absurd that dismissing the notion of performing arguably the most extreme form of monetary easing can be taken as hawkish, but this reflects the growing levels of dependency on seemingly ever more stimulus." The yen surged to as strong as 105.41 yen per dollar after Kuroda's remarks before settling around 106.32, 0.5 percent up on the day. The BBC later said its interview with Kuroda had been conducted in mid-June, helping cool the yen's gains. The dollar had earlier touched a six-week high above 107 yen on reports that a fiscal stimulus package from Tokyo might be as much as twice as large as previously floated.
After the Kuroda comments, the euro was also half a percent lower against the yen. Against the dollar, it was up less than 0.1 percent at $1.1019. Beyond the yen moves, the biggest decline among the major currencies came in the New Zealand dollar, down 0.7 percent to $0.6976, having touched a six-week low of $0.6952.
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