SINGAPORE — The dollar firmed slightly on Tuesday while the yen swung between losses and gains after the Bank of Japan (BOJ) left rates unchanged and decided to slow the pace of its balance sheet drawdown next year.
The BOJ maintained short-term interest rates at 0.5 percent as expected at the conclusion of its two-day monetary policy meeting and laid out a new bond taper plan for fiscal 2026.
The yen was choppy in the aftermath and was last slightly higher at 144.70 per dollar, with the focus now on comments at a post-meeting press conference by BOJ Governor Kazuo Ueda later in the day.
“Attention will be on what Governor Ueda says at his press conference. Markets will be particularly interested in how he categorizes the inflation trends in Japan, especially in the context of heightened trade tensions,” said Carol Kong, a currency strategist at Commonwealth Bank of Australia.
Japanese Prime Minister Shigeru Ishiba and US President Donald Trump did not reach a tariff agreement.
In the broader market, the dollar held to its gains in a general risk-off move as tensions in the Middle East weighed on sentiment.
The White House said on Monday that Donald Trump is leaving the Group of Seven summit in Canada a day early due to the situation in the Middle East, as the president has requested that the national security council be prepared in the situation room.
Trump had earlier urged everyone to immediately evacuate Tehran, and reiterated that Iran should have signed a nuclear deal with the United States.
The risk-sensitive Australian dollar was up 0.09 percent at $0.6530, after falling earlier in the session. The New Zealand dollar traded 0.14 percent higher at $0.6068.
