Dollar edges higher, yen slumps as BOJ maintains dovish stance
Investing.com - The U.S. dollar edged higher in early European trade Tuesday, while the yen slumped after the Bank of Japan maintained its ultra-dovish stance.
At 03:20 ET , the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.2% higher at 106.122.was the first of this week’s major central banks to hold its policy-setting meeting earlier Tuesday, and it decided to keep interest rates negative, while only making minimal changes to its yield curve control policy.
The central bank said it will allow some more flexibility in its YCC, potentially letting bond yields move above their 1% cap. But this largely disappointed markets hoping for a more aggressive move by the BOJ.surged 0.7% to 150.11, crossing the widely-watched 150 level once more, putting potential government intervention into the spotlight once more.
The BOJ also forecast higher inflation and worsening economic conditions in the coming years, and that it will continue with its pace of quantitative easing in the near-term.received a boost from the yen weakness, but it has also been underpinned by risks of another rate hike from the Federal Reserve given data points to a still-resilient U.S. economy.
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