The yen fell against major currencies following the Bank of Japan’s (BOJ) decision to hold steady its ultra-loose monetary policy. The central bank’s commitment to its stimulus program underscores its determination to reach its 2% inflation target.

BOJ Policy Stance

The BOJ’s monetary policy board voted to maintain its current policy, which aims to increase the monetary base at an annual pace of 60-70 trillion yen. This involves purchasing Japanese government bonds (JGBs) and other assets to inject liquidity into the financial system.

Market Reaction

The yen’s decline reflects market expectations that the BOJ will maintain its accommodative stance for a considerable period, contrasting with other central banks that are considering tightening monetary policy. The dollar rose against the yen following the announcement.

Economic Outlook

The BOJ acknowledged that Japan’s economy continues to recover moderately. However, it also noted that risks to the outlook remain, including the impact of global economic developments and fluctuations in financial markets. The central bank will continue to closely monitor economic and price developments to ensure that its policy remains appropriate.