Yen Rises to 4-Month High

While it held broad policy settings intact, pinning short-term JGB yields at -0.1% and the 10-year yield near zero, the BOJ chose to let long-term yields push 50 basis points on either side of its 0% target, more comprehensive than the 25 basis point band formerly.

The dollar last traded at 3.5%, softer at 132.35 yen. It struck a low of 132 yen. A level last witnessed in mid-August.

Most BOJ watchers had anticipated no changes until the present governor, Haruhiko Kuroda, 10-year term finishes at the end of March.

The 10-year JGB yield leaped to 0.46% from the prior cap of 0.25%. It dragged equivalent U.S. Treasury yields increased as well, with the 10-year skyrocketing to the highest this month at 3.711%.

The U.S. dollar index fell, declining 0.6% to 103.99, within its trading range this month of 103.44 to 105.90. The index measures the U.S. currency versus the yen and five other major peers, including the euro and sterling.

Other Currencies

The index had been pushing towards the top of that range before the BOJ statement as investors resumed assessing the Federal Reserve’s message of higher interest rates for longer.

The yen’s gains were wide, with the euro dropping as much as 3.3% to the lowest since late September at 140.17 yen and the sterling also gliding some 3.4% to the most inferior since Oct. 12 at 160.34 yen.

Versus the dollar, the euro was higher by 0.2% at $1.0628, and the sterling edged 0.07% more, increasing to $1.2154.

The Aussie dropped over 3.6% to 88.34 yen, a seven-month trough, and New Zealand’s kiwi dipped 3.8% to 83.82 yen, a two-month low, individually.