Yen gains against US dollar after Bank of Japan holds rates
[NEW YORK/LONDON] The yen was on track for a third consecutive daily gain on Friday (Oct 30) after the Bank of Japan...
The Japanese yen strengthened against the US dollar on Friday (October 30) following the Bank of Japan's decision to keep interest rates unchanged, while upgrading its inflation outlook. Despite the BOJ's policy entering a more hawkish phase, the greenback was pressured by falling US Treasury yields. The yen was last up 0.11 percent at 157.51 per US dollar, but was expected to record a monthly loss in October.
Analysts noted the market's disappointment with the BOJ's decision, citing the yen's strength but not to the extent seen before. The US Federal Reserve and Reserve Bank of New Zealand also maintained unchanged interest rates during the week, leaving the macroeconomic backdrop favorable for potential BOJ hikes in December, March, and July, aiming for rates to reach 2 percent before pausing to assess tightening impacts.
Meanwhile, the euro declined 0.12 percent to US$1.1168, on track for a second consecutive monthly loss in October, after the European Central Bank kept rates steady and signaled tighter financial conditions due to higher bond yields. This led to traders lowering expectations for a December rate hike. Both the euro and other currencies were expected to experience monthly losses in October.
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