Yen inches up in Tokyo after BoJ holds fire

Tokyo - The yen ticked up in Tokyo on Tuesday after the Bank of Japan (BoJ) decided to leave its monetary stance unchanged, including its controversial negative interest rate policy.

Markets had been keen to see if Japanese policymakers would unleash fresh stimulus after launching the widely panned negative deposit rate in January.

But the BoJ on Tuesday announced no new measures at the end of a two-day policy meeting, stressing that it wanted to further monitor the country's business confidence and deflation outlook.

The BoJ has already embarked on a massive bond-buying stimulus and introduced negative interest rates - effectively charging banks to park new deposits with it - aimed at stimulating lending to people and businesses.

But the move was criticised for signalling possible desperation on the part of the bank's policymakers, who are seen to be running out of effective new measures to boost stalling growth and inflation.

"The BoJ is going to assess the impact of the negative interest rate on the market and economy before taking new action," said Minori Uchida, head of Tokyo global markets research at Bank of Tokyo-Mitsubishi UFJ.

"But pressure on the BoJ will remain strong for the time being," Uchida told AFP.

Investors are now focusing on a Bank of England meeting later this week and a two-day Federal Reserve meeting from Tuesday.

The US central bank gathering is not expected to produce an interest rate hike, but could offer fresh cues as to the outlook for higher rates.

In Tokyo, the dollar fell to ¥113.34 from ¥113.77 shortly before the BoJ announcement, and ¥113.78 in US trade on Monday. The euro changed hands at ¥125.89 against ¥126.33.

"Some players who had bet on fresh (easing) by the BoJ bought back the yen, which sent it slightly higher," Uchida said.

The euro, meanwhile, edged up to $1.1108 from $1.1103 in New York.

In other trading, the Australian dollar slipped after hitting an eight-month high Monday when commodity-linked currencies got a boost from a rise in global equities.

The Aussie bought 74.87 US cents in Tokyo trading, down 0.37%.

In emerging-market currencies, South Korea's won, which rose to its highest level in more than two months, fell 0.28%, while the Philippine peso lost 0.11% and the Indonesian rupiah was down 0.21%.