Yen falls 1% against dollar after Ueda comments on rates
The drop comes a day after the Bank of Japan raised its overnight call rate to 1.25%, a quarter point higher than before.
Published
The yen fell 1% against the dollar on Friday after comments from Bank of Japan Governor Kazuo Ueda. He said it is hard to tell whether policy is still too easy and that the central bank can act again without a long wait. He also said no policy options are off the table and that the BOJ is weighing different scenarios.
The remarks came a day after the BOJ raised its overnight call rate to 1.25%, a quarter point increase that followed a hike in June. Ueda has also cautioned that large or repeated rate increases risk overshooting, and he has repeated the BOJ's long-standing position that confirming inflation has stabilized at 2% will take time, with decisions to hinge on incoming data.
The 1% move is a small piece of a bigger shift. The yen has extended its gains to 2% against the dollar amid expectations of further rate hikes and concern about possible currency intervention. Ueda's comments keep the door open to more tightening without pointing to anything imminent, which lines up with what markets had already priced in. Neither his words nor Friday's currency move change the near-term outlook for when the BOJ will move next.