Dollar rises sharply to upper 134 yen as BOJ maintains easing policy

The U.S. dollar briefly rose by around 1 yen to the upper 134 yen range Friday in Tokyo in reaction to the Bank of Japan's decision to maintain ultralow interest rates.

The Nikkei index further gained ground, rising by more than 300 points, or 1 percent, at one point, after the central bank concluded its first policy meeting under its new governor, Kazuo Ueda.

Although the BOJ's decision was widely expected by the market, the yen's weakness came after the central bank said core consumer prices are likely to rise 1.6 percent in fiscal 2025 from a year earlier, remaining under its inflation target of 2 percent.

"The core consumer price outlook was weaker than the market consensus, leading to yen selling," said Yukio Ishizuki, senior foreign exchange strategist at Daiwa Securities Co. "It seems difficult to find a way to end the ultraloose policy."

At 2 p.m., the dollar fetched 134.77-78 yen compared with 133.96-134.06 yen in New York and 133.78-79 yen in Tokyo at 5 p.m. Thursday.

The 225-issue Nikkei Stock Average was 250.96 points, or 0.88 percent, higher at 28,708.64 at 2 p.m. The broader Topix index was 14.51 points, or 0.71 percent, higher at 2,047.02.

© Kyodo News