Dollar hits 7-month low vs. yen on slowing U.S. inflation

The U.S. dollar hit a fresh seven-month low of around 128.60 yen Friday in Tokyo amid slowing inflation in the United States and speculation that the Bank of Japan may further shift away from its ultraloose monetary policy.

The yield on 10-year Japanese government bonds rose to 0.545 percent, marking the highest level since June 2015 and topping the upper limit of 0.500 percent set by the BOJ for the first time since the trading band was widened last month. The move prompted yen buying on a narrowing U.S. and Japanese interest rate differential.

Tokyo stocks snapped a five-day winning streak, pressured by the yen's strength and higher long-term interest rates, with export-oriented automakers and tech companies taking a hit.

The 225-issue Nikkei Stock Average ended down 330.30 points, or 1.25 percent, from Thursday at 26,119.52. The broader Topix index finished 5.10 points, or 0.27 percent, lower at 1,903.08.

© Kyodo News