Yen slips as BoJ stays put on policy at meeting

Rate-setters in Tokyo stood pat on monetary policy as expected, although according to analysts there had been some speculation over a potential shift in Yield Curve Control.

In response, as of 1100 BST the US dollar was trading 0.95% higher versus the Japanese yen at 147.68.

Significantly, the Bank of Japan's latest inflation forecasts were revised higher, but those for its definition of core consumer prices remained comfortably below target, so that there was room for it to maintain its loose policy, said Lee Hardman, currency analyst at MUFG Bank.

The forecast for the annual increase in core CPI in fiscal year 2024 was bumped up by a tenth of a percentage point to 1.6% while headline CPI was seen retreating from 2.9% during the current fiscal year to 1.6% by FY 2024.

"The continuation of the BoJ’s loose policy settings leaves the yen vulnerable to further weakness and keeps the onus on direct intervention to dampen the pace of yen selling," Hardman said.

"[...] Overall, the BoJ’s dovish policy stance continues to encourage a weak yen but downside risks are beginning to ease as global yields are beginning to peak in the near-term."