Yen gains against US dollar after Bank of Japan holds rates
Published Sun, Nov 1, 2026 · 04:31 PM
[NEW YORK/LONDON] The yen was on track for a third consecutive daily gain on Friday (Oct 30) after the Bank of Japan (BOJ) left rates unchanged and upgraded its inflation outlook, while declining US Treasury yields weighed on the greenback.
The BOJ left its main rate at 1.25 per cent in a widely anticipated move, but stressed that its policy had entered a new, more hawkish phase open to raising rates once every few months.
The yen was last up 0.11 per cent at 157.51 per US dollar, but was on track for a monthly loss in October.
“The market is a little disappointed in the BOJ,” said Joseph Trevisani, senior analyst at FXStreet. “The yen is a little bit stronger today, but not as strong as it has been. We still have the Fed bias countering what the BOJ is doing.”
The BOJ wrapped up a week of central bank decisions last week, with the European Central Bank (ECB), US Federal Reserve and Reserve Bank of New Zealand all leaving interest rates unchanged as they bide their time amid stubborn inflation and tightening financial conditions.
“We think the macroeconomic backdrop will remain sufficiently constructive for the BOJ to hike in December, March and July, bringing rates to 2 per cent before taking a pause to assess the impact of tightening,” said TS Lombard analyst Rory Green in an investor note.
The euro was down 0.12 per cent at US$1.1168 and was headed for a second straight monthly loss in October. It hit its lowest since May 2025 on Thursday, after the ECB left rates unchanged and indicated higher bond yields had tightened financial conditions, initially prompting traders to lower their expectations for a hike in December.
The Bank of England and the Reserve Bank of Australia will be in focus this week.
Sterling strengthened 0.2 per cent to US$1.3396. The Australian dollar strengthened 0.1 per cent versus the greenback to US$0.70345. Both currencies were on track for an October monthly gain.
AI worries
When investors seek out safe-haven assets, the dollar is often a beneficiary. But on Friday, the drag from a decline in Treasury yields was stronger. Results from Alphabet, Amazon and Intel last week rekindled worries about artificial intelligence spending, which triggered a sell-off in tech stocks on Friday.
The dollar index, which tracks the US currency against six others, was flat at 101.88. It was set for a second straight month of gains in October.
The euro found some support from the pressure that the AI-led sell-off put on the dollar, but with euro zone economic growth lagging that of the US, this strength may soon dissipate, according to Barclays currency strategist Lefteris Farmakis.
Elsewhere, Bitcoin was down 2.6 per cent to US$76,780.93, as investors pulled money from digital assets after hackers stole US$6.3 billion from Binance, the world’s biggest cryptocurrency exchange, in the biggest crypto heist on record. REUTERS
