The yen weakened after the Bank of Japan made only minor changes to its yield-curve-control settings, disappointing some in the market who had hoped for a further winding back of its accommodative monetary policy stance.
“Dollar-yen appears disappointed by the extent of the tweak though, especially after the Nikkei report,” said Carol Kong a strategist at Commonwealth Bank of Australia in Sydney. “The statement also continues to strike a dovish tone with the BOJ reiterating that it will patiently continue with monetary easing.”
The dollar strengthened versus all its Group-of-10 peers, extending gains immediately after the BOJ decision. Treasury yields dropped after the statement, before paring their decline. The US Treasury on Monday reduced its estimate for federal borrowing for the current quarter, citing stronger-than-expected revenue.