Market News
Yen pressured as BOJ holds rates, dollar set for steep weekly drop - REUTERS
Summary
- Yen holds near 160/dollar after BOJ decision
- BOJ keeps rates steady, focus on Ueda comments
- Dollar selling intact as Greenland saga rumbles on
- Trump touts 'total access' Greenland deal with NATO
SINGAPORE, Jan 23 (Reuters) - The yen stayed under pressure after the Bank of Japan held rates steady on Friday, as expected, while the U.S. dollar headed for its steepest weekly drop since June as geopolitical tensions and abrupt policy shifts around Greenland unsettled investors.
The yen was slightly weaker at 158.54 following the BOJ's rate decision and after it raised its economic and inflation forecasts, highlighting the central bank's readiness to continue hiking still-low borrowing costs.
Last month, the BOJ raised its policy interest rate to a 30-year high but that has not helped the frail yen. Traders are concerned that a break beyond 160 per dollar could prompt Tokyo to step into the currency market to support the yen.
Moh Siong Sim, FX strategist at OCBC, said the market was hoping the yen's weakness might trigger a more forceful BOJ response but the central bank maintained the same rhetoric - an outcome that was pretty neutral for markets.
"After all, yen indirectly fits into the economic projections if the weakness is sustained," he said.
