The Japanese Yen is trading slightly lower against the U.S. Dollar by 0.04% to 121.26 this morning. Yen weakness came after the Bank of Japan unveiled negative interest rates on Friday, which could further push the European Central Bank to expand its own monetary easing policy.

Click Here For More Market Exclusive Updates & Analysis

The yen traded broadly weaker against major currencies after the Bank of Japan’s statement to slash rates to a negative 0.1% took the markets by surprise. The BoJ’s move is seen as a part of its efforts to curb deflationary pressure and prompt commercial lenders to extend more loans, essentially penalizing them for not loaning out excess funds.

On the other hand, the U.S. dollar remains buoyant against major currencies, supported by a slew of data. The much-awaited update on the U.S. economy showed that growth in the fourth quarter was at 0.7%, slightly below the estimates of 0.8% growth.

The Commerce Department reported that the U.S. economy rose 2.4% in 2015. The BoJ’s unexpected move alongside monetary easing measures undertaken by the European Central Bank shows the diverging monetary policy stance between the U.S. and the rest of the world. Manufacturing activity reported from the Institute of Supply Management in the U.S. will be a significant update to watch for later in the day.

China PMI dipped

The Chinese Yuan fell against the greenback and other currencies after the Chinese manufacturing purchasing managers’ index fell below a level of 50 to 49.4 from a reading of 49.7 in December. The PMI highlights that growth in China is still contracting, even by official government estimates. Apart from this, another report indicated that China’s Caixin factory PMI inched up marginally to 48.4 from 48.2, pointing that the region began 2016 on a weak note. USD/CNY was seen trading up by 0.05% at 6.5791.

The British Pound was strong against the U.S. Dollar, up by 0.31% to 1.4287. A reading on U.K. manufacturing activity is due to be released today.