The Yen fell against major currencies after the Bank of Japan (BOJ) announced it would maintain its ultra-loose monetary policy. This decision comes as other central banks around the world are raising interest rates to combat rising inflation.

The BOJ’s commitment to its easing policy reinforces expectations that it will remain an outlier. The central bank believes that Japan’s economic recovery is still fragile and requires continued monetary support.

The widening interest rate differential between Japan and other major economies, such as the United States and Europe, is putting downward pressure on the Yen. Investors are attracted to higher-yielding currencies, leading to capital outflows from Japan.

The BOJ’s monetary policy stance contrasts sharply with the U.S. Federal Reserve, which has been aggressively raising interest rates to curb inflation. The European Central Bank has also begun to tighten its monetary policy.

Analysts expect the Yen to remain under pressure as long as the BOJ maintains its ultra-loose monetary policy. The currency’s weakness could benefit Japanese exporters but could also lead to higher import prices.