News: FOREX-Yen plunges as BOJ sticks to ultra-easy policy

The yen dived sharply against major currencies on Wednesday after the Bank of Japan maintained ultra-low interest rates, disappointing some investors who had hoped the central bank would relax its yield curve control policy further.
The central bank stunned the market last month by raising its cap on the 10-year yield JP10YTN=JBTC to 0.5% from 0.25%, doubling the band it would permit above or below its target of zero. Since then, speculation had swirled that the BOJ could tweak its yield curve control (YCC) policy further or even scrap it.
At a two-day policy meeting, the BOJ kept intact its YCC targets, set at -0.1% for short-term interest rates and around 0% for the 10-year yield, by a unanimous vote. It also made no change to its guidance that allows the 10-year bond yield to move 50 basis points either side of its 0% target.
As a result, the yen suffered broad losses, with the Asian currency down 2.3 % against the dollar JPYUSD=R and was set for its worst day since March 2020.
The euro EURJPY=EBS gained 2% to 141.1 yen and sterling GBPJPY=EBS rose by more than 2% to 160.71 yen. The Australian dollar AUDJPY=EBS gained 2.2% and Singapore dollar SGDJPY=R rose 1.9%. The U.S. dollar was last up 2.42% at 131.22 yen.
"The can has been kicked down the road and the attention will shift to the next meeting," said Moh Siong Sim, currency strategist at Bank of Singapore. "It's a question of when, not if."
Some investors have been betting the BOJ will be forced to adjust, or even dismantle, YCC on the view the central bank cannot sustain the massive volume of bond buying needed to defend the cap.
On Wednesday, Japanese government bond yields tumbled the most in a decade, retreating sharply from the central bank's 0.5% ceiling after the decision. The 10-year yield has repeatedly breached the ceiling in the past four sessions.
"Speculators are likely to increase their hawkish bets on a policy shift from the BOJ," said Anderson Alves, market analyst at ActivTrades.
"Today's policy price action shows that the current framework could fuel another unwelcome plunge for the yen that could inflate the cost of raw material imports."
The dollar index =USD , which measures the safe-haven dollar against six peers, rose 0.42% at 102.810, its biggest one-day percentage jump since Jan. 5.
Against the U.S. dollar, sterling GBP=D3 was last trading at $1.2281, down 0.06% on the day, while the euro EUR=EBS weakened 0.18% to $1.0769.
The Australian dollar AUD=D3 rose mostly flat, while the kiwi NZD=D3 rose 0.30% at $0.645.
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	Currency bid prices at 0533 GMT 
 Description	  RIC		 Last		   U.S. Close  Pct Change	 YTD Pct	 High Bid	Low Bid 
											  Previous				   Change				  
											  Session											
 Euro/Dollar	   EUR=EBS	$1.0773		$1.0790	 -0.16%		 +0.54%	  +1.0799	 +1.0767 
 Dollar/Yen		JPY=EBS	131.2100	   128.1800	+2.40%		 +0.02%	  +131.5550   +128.2750 
 Euro/Yen		 																			 
 Dollar/Swiss	  CHF=EBS	0.9235		 0.9218	  +0.13%		 -0.18%	  +0.9245	 +0.9218 
 Sterling/Dollar   GBP=D3	 1.2271		 1.2287	  -0.14%		 +1.46%	  +1.2289	 +1.2254 
 Dollar/Canadian   CAD=D3	 1.3381		 1.3391	  -0.06%		 -1.23%	  +1.3409	 +1.3377 
 Aussie/Dollar	 AUD=D3	 0.6986		 0.6986	  +0.06%		 +2.55%	  +0.7002	 +0.6975 
 NZ				NZD=D3	 0.6445		 0.6430	  +0.23%		 +1.50%	  +0.6458	 +0.6424 
 Dollar/Dollar																				   
All spots FX= Tokyo spots AFX= Europe spots EFX= Volatilities FXVOL= Tokyo Forex market info from BOJ TKYFX
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World FX rates	https://tmsnrt.rs/2RBWI5E 
Japan's yen and yields https://tmsnrt.rs/3iQF9S7 BOJ's yield curve defence https://tmsnrt.rs/3Xlbdws
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