The yen hovered around a four-month high against the dollar on Wednesday as traders contemplated the shock move by the Bank of Japan to adjust its bond yield control programme and potentially open the door to move away from its ultra-easy monetary policy.
, the BOJ on Tuesday decided to let long-term yields move 50 basis points either side of its 0% target, wider than the 25 basis point band previously, even as the central bank kept broad policy setting unchanged.
Japanese yen weakened 0.26% versus the greenback at 132.06 per dollar early on Wednesday, but stayed not far off its four month high of 130.58 per dollar it touched on Tuesday as it spiked 3.8% higher. The currency market is still digesting BOJ's policy tweak, said Carol Kong, a currency strategist at the Commonwealth Bank of Australia.
"The market has interpreted the decision as step towards an eventual pivot from the current ultra-dovish monetary policy," she said, noting the yen could continue to appreciate in the near term. The move from the BOJ comes as investors fret about a slowing world economy, sky-high inflation and other central banks' moves to hike interest rates. Global investors have been
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