Yen falls after Bank of Japan sticks to monetary easing, dollar rises

The yen fell on Friday as the Bank of Japan stuck to its accommodative policy, while the dollar attempted to recover from losses at the weekend on expectations that the Federal Reserve would signal a slowdown in interest rate hikes.

The dollar was last up 0.8 percent against the yen at 147.43 after the Bank of Japan kept short-term interest rates unchanged at 0.1 percent and pledged to keep the 10-year bond yield at zero percent, as expected.

“We are not planning to raise interest rates or go out (of easing) anytime soon,” said Haruhiko Kuroda, Governor of the Bank of Japan.

He added that policies would be changed if Japan’s inflation rate approached 2%, but that this would be announced to the markets clearly.

The dollar also rose against the pound, which fell 0.4 percent to 1.1516 against the dollar, and against the euro, which fell 0.2 percent to 0.9941 against the dollar, as investors exercised a little caution.

The single currency is trying to recover after falling 1% the previous day after the European Central Bank raised interest rates by 75 basis points.