The yen strengthened after the Bank of Japan kept its record monetary policy stimulus unchanged.
The yen is this month’s worst performing major currency as a recovery in global stocks sapped demand for havens even as hedge funds and other speculators have piled up the most bullish bets since 2008. Japan’s currency has come under pressure as futures show the odds of a Fed rate increase this year have surged to a two-month high.
Governor Haruhiko Kuroda and his board kept the target for increasing the monetary base unchanged, and left their benchmark rate at minus 0.1 percent, the BOJ said in a statement on Tuesday. The decision was forecast by 35 of 40 economists surveyed by Bloomberg. The central bank reiterated that it will add easing if necessary.
The yen climbed 0.4 percent to 113.40 per dollar as of 12:51 p.m. in Tokyo. It had weakened 1 percent this month prior to the BOJ announcement.
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Japan’s currency closed down 1.9 percent versus the dollar on Jan. 29, its biggest daily decline since October 2014 when the BOJ surprised markets by announcing the introduction of negative deposit rates. The yen jumped 7.5 percent in February, the steepest gain since October 2008.
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