The yen weakened on Tuesday and languished near a one-year low against the dollar, after a small step by the Bank of Japan (BOJ) towards ending years of massive monetary stimulus failed to appease some investors who had expected a bigger move.
At the conclusion of its two-day policy meeting, the BOJ said that it would keep the 10-year government bond yield around 0% set under its yield curve control (YCC), but re-defined 1.0% as a loose "upper bound" rather than a rigid cap.
It also removed a pledge to defend the level with offers to buy unlimited amount of bonds.
Some analysts touted the move as a de-facto abolishment of the BOJ's controversial YCC regime, but the yen still slid roughly 0.8% past the 150 per dollar threshold to hit an intraday low of 150.26 .
The euro similarly jumped about 0.7% to 159.30 yen , while sterling gained 0.63% to 182.44 yen.
The move in the yen also reflected expectations of a tweak that had already been priced in, following a Nikkei report on Monday that said the BOJ could potentially allow 10-year JGB yields to rise above 1%.
Elsewhere, the greenback edged broadly higher, with the dollar index last up 0.16% at 106.33.
While the index looked set to end the month largely unchanged, analysts say the dollar remains underpinned by risks of another rate hike from the Federal Reserve, noting a still-resilient U.S. economy.
The euro looked set to reverse two straight months of losses with a slight 0.3% gain for October, with the single currency last 0.08% lower at $1.0606.
Data on Monday showed inflation in Germany eased noticeably in October, while a separate report showed Europe's largest economy shrank slightly in the third quarter.
Spain's 12-month inflation in October was unchanged from the previous month at 3.5%, preliminary data also out on Monday showed.
The figures come ahead of euro zone inflation data due later on Tuesday.
Sterling fell 0.15% to $1.2149 and was poised to lose nearly 0.5% for the month, ahead of an interest rate decision by the Bank of England later in the week where expectations are for the central bank to stand pat.
Elsewhere, the Australian dollar slid 0.29% to $0.6355 and was headed for a monthly loss of more than 1%.
Source : Reuters
