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The Bank of Japan kept its ultra-low interest rates unchanged Friday and stopped short of signaling another hike, pushing the yen to a fresh 34-year low against the dollar.
Officials last month announced the first increase in borrowing costs for 17 years as inflation continued to stick above their two percent target but warned they would take a steady approach to normalizing monetary policy.
While widely expected, Friday’s decision had been keenly awaited to see if decision-makers would respond to a drop in the yen that has pushed it to levels not seen since 1990.
The BoJ has been a global outlier in sticking to an ultra-loose policy while other central banks pushed rates up as they fought against surging inflation — causing a wide differential that saw investors push into other currencies.
