The yen dropped after the Bank of Japan kept its ultra-loose monetary policy unchanged as expected, and shares trimmed losses.
The Japanese currency fell as much as 0.4% to 148.18 per dollar, after reaching an almost 11-month low of 148.46 on Thursday. Yields on benchmark 10-year government bonds stayed lower at 0.735%, while the Topix share gauge was down 0.1%. The next focus will be BOJ Governor Kazuo Ueda’s news conference starting at 3:30 p.m. Tokyo, where he may elaborate on his outlook for monetary policy.
The yen has faced pressure to weaken due to a widening yield gap with the US, where the Treasury 10-year rate touched its highest level since 2007 at 4.5% on Friday on bets that interest rates in the world’s biggest economy will be kept higher for longer. But Japanese yields have climbed too in line with moves in overseas debt as well as on growing speculation the BOJ will tweak its policy framework again after making yield-curve control more flexible in July.
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