The Yen dropped against significant currencies overnight after the Bank of Japan maintained ultra-low interest rates. This is enough news to make investors angry because they hope the central bank can drive the control policy further.

Last month, the central bank stunned the market by raising its cap on the 10-year yield from 0.5% to 0.25%. It then doubles the band and permits above or below its target of zero. 

Since then, speculation on the Bank of Japan could further tweak its yield control policy. In addition, at the 2-day meeting, the Bank of Japan said it would keep its YCC target intact and set the short-term interest rate for ten-year yield. 

This is one of the potential causes of no change and requires unique guidance. The Yen, to this day, continues to suffer broad losses even though experts have predicted an increasingly stringent Bank of Japan policy. 

But unfortunately, the dollar rose as much as 2.7% on Thursday to 131.58 yen, and the same fate befell the Euro and Sterling by increasing 1.6% against the Yen.

Bank of Japan Leaves the Currency Unchanged, Might be One of the Reasons Why the Yen Keeps Dropping

The Bank of Japan, Japan's central bank, maintains the ultra-easy monetary policy and remains unchanged on Wednesday. This is bucking heavy speculation that this can be tweaked as a critical lever and send the Yen plunging. 

This is a decision that is far from the predictions of analysts. This decision was taken two days after the Bank of Japan held a meeting. Bank officials shocked the market by widening the bathe band, which allows rates for 10-year government bonds to move. 

The bank has also prepared a surprise decision for the near future. The range was set last month and has been breached regularly recently. Intensifying speculation from the Bank of Japan forced this central bank to act again. 

Meanwhile, the policy marker said they would work on the yield curve control range. Bank Governor, Haruhiko Kurada, told reporters that the current policy is sustainable. 

With more time, it will see the effects of last month's tweak.  And according to them, it is also vital to support and boost Tokyo Stocks.

"We do not believe it is necessary further to expand the fluctuation band for the long-term bond yield. What is important is that we support the economy so the business can increase wages," said Bank Governor Haruhiko Kuroda, talking about BoJ policies and the Yen.

Summarizing today's movement, the Yen plunged on Thursday after the BOJ continued maintaining the ultra-easy monetary policy. This makes rising market expectations force the central bank to move away from low-interest rates, while yield curve control is the pillar.

"Japan's economy, despite being affected by factors such as high commodity prices, has picked up as the resumption of economic activity has progressed while public health has been protected from Covid-19," stated in the quarterly outlook report owned by the central bank.

Bank of Japan Keeps Policy Steady But Nearing Phase Where Monetary Easing Can End

The Minister of Economy, Trade and Industry said that Japan is nearing the phase for a more specific monetary policy. Of course, the procedures taken by the government will significantly determine the movement of the Japanese economy.

In this condition, Japan's desire to control inflation must be balanced with many things. Several things relate to the central bank's policy to keep the policy steady. So this condition makes Japan gear up.

Yen's movement today fell 2.7% against the US Dollar, and 1.7% against the Euro and Pound Sterling, on Thursday's movements. The biggest reason is that the Bank of Japan still needs to be willing to change its monetary policy; currently, it remains low.