Yen wallows near record low to euro as BOJ keeps cautious tone after rate hike

Core Insights - The Japanese yen is trading near an 11-month low against the U.S. dollar and close to a 17-month low against the Australian dollar, indicating significant depreciation in the currency market [1][7] - The Bank of Japan (BOJ) raised the policy rate by 0.25% to a three-decade high of 0.75%, but the lack of hawkish guidance on future rate hikes led to a selloff in the yen [2][6] - Governor Ueda emphasized a data-dependent approach for future monetary policy adjustments, which disappointed market expectations for clearer guidance [4][5] Currency Performance - The yen fell 1.3% against the euro, 1.4% against the U.S. dollar, and 1.5% against the Australian dollar following the BOJ's announcement [2][6] - The U.S. dollar was at 157.56 yen, slightly down by 0.1%, but remained near the previous month's high of 157.90 [6] - The euro traded at 184.51 yen, easing 0.1% but staying close to its record peak of 184.75 [6] Market Reactions - The BOJ's decision triggered a broad selloff in Japanese government bonds, with the 10-year yield surpassing 2%, the highest level since 1999 [2][6] - Analysts noted that the absence of clear guidance on future rate hikes led to disappointment in the markets, resulting in further yen selling [5][6] - The Australian dollar slightly weakened to 104.20 yen but remained close to the 104.39 yen mark reached earlier this month, supported by solid risk sentiment and interest rate differentials [7]