Yen fell as the Bank of Japan maintained an easy monetary policy

The yen experienced a decline on Tuesday following the Bank of Japan’s decision to maintain its ultra-loose monetary policy at the conclusion of its two-day meeting, aligning with market expectations. The Japanese currency initially dropped by approximately 0.3 percent, reacting to the central bank’s decision to keep the short-term interest rate at -0.1 percent and the ten-year bond yield at around zero percent. However, the yen later recovered some of its losses.

At its quarterly forecast report, the Bank of Japan lowered its projection for core consumer price inflation for the fiscal year beginning in April to 2.4 percent, down from the 2.8 percent forecasted in October. The forecast for fiscal year 2025 was also revised slightly to 1.8 percent from 1.7 percent.

The yen weakened against the euro, declining by 0.08 percent to 161.32 yen. Meanwhile, the British pound gained 0.2 percent against the yen, reaching 188.28 yen, not far from its high of 188.91 yen recorded on Friday, the strongest level since August 2015.

In external transactions, the yuan rose by 0.3 percent to 7.1700 against the dollar. The Australian dollar also saw an increase of more than 0.5 percent, reaching $0.6607.

Bitcoin, in the realm of cryptocurrencies, experienced a 0.6 percent rise to $40,048 after falling below the $40,000 level in the previous session for the first time since the launch of 11 spot Bitcoin funds traded on the stock exchange on January 11.