Yen rises, underpinned by BOJ policy tweak; dollar retreats

The yen firmed on Thursday, returning towards a four-month peak against the dollar hit earlier in the week after the Bank of Japan’s surprise tweak to its bond yield control spurred bullish yen bets, while the dollar moved broadly lower, Reuters reported.

The yen JPY=EBS rose about 0.5% to 131.85 per dollar, after surging to a four-month high of 130.58 on Tuesday in the aftermath of the BOJ’s decision to allow the 10-year bond yield to move 50 basis points either side of its 0% target, wider than the previous 25 basis point band.

The greenback, which rose 0.6% against the yen in the previous session, had failed to meaningfully recoup the 3.8% slump that followed Tuesday’s news.

Against the euro EURJPY=EBS, the yen steadied at 140.34, while trading at 159.82 per pound GBPJPY=EBS. Both pairs were holding close to roughly three-month peaks hit on Tuesday.

The euro EUR=EBS was last 0.31% higher at $1.0638. Against a basket of currencies, the U.S. dollar index =USD fell 0.3% to 103.92.

British public borrowing unexpectedly jumped last month to its highest for any November on record, figures overnight showed, underscoring challenges for the economy.