Yen slips as central banks' views leave stocks mixed

Wed Jul 27, 2016 4:59pm EDT
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By Herbert Lash

NEW YORK (Reuters) - The yen eased against the dollar on Wednesday after Japan unveiled a surprisingly large $265 billion stimulus package, while U.S. equity markets mostly declined following the Federal Reserve's decision to leave interest rates unchanged.

The Fed said at the end of a two-day meeting of its policy-setting Federal Open Market Committee that near-term risks to the U.S. economy had diminished, a view that could open the door to a resumption of monetary policy tightening this year.

The U.S. central bank said the economy had expanded at a moderate rate and job gains were strong in June. It added that household spending also had been "growing strongly" and pointed to an increase in labor utilization.

The Fed's statement was broadly constructive about the economy and the absence of any mention of international risks was notable, said Brad McMillan, chief investment officer at Commonwealth Financial in Waltham, Massachusetts.

"There is no hat tip toward a September rate increase. There is no signal there," McMillan said. "So in many respects I see this as a Goldilocks statement from a market perspective."

The benchmark S&P 500 index and Dow industrials closed slightly lower, reversing modest gains after the Fed statement.

The technology-rich Nasdaq was boosted by Apple (AAPL.O: Quote), which said it sold more iPhones than expected in its third quarter and gave an upbeat forecast.

Apple's shares surged 6.58 percent to $103.03.   Continued...

A man holds Japanese 10,000 Yen ($121) bank notes in front of a bank in Tokyo November 22, 2012.  REUTERS/Kim Kyung-Hoon/File Photo