The Bank of Japan held steady on its accommodative stance as its two-day meeting came to an end. At a time when major central banks around the world have either started normalizing rates or signaled that they’re on a path of doing so, the BoJ’s current stance is expected to add downside pressure on the Japanese currency.

As anticipated, the BoJ maintained the 0.1% interest it charges banks for holding reserves with the central bank. Moreover, it made no changes to the yield target of around zero percent for 10-year Japanese government bonds and maintained its flexibility in engaging in bond purchases depending on the state of the economy.

Additionally, the Bank was more optimistic on private consumption supporting the economy as well as on growth from overseas economies, signaling its confidence on the existence of positive momentum for the nation which heavily relies on exports to fuel growth.

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In terms of reaction in the forex markets, the yen is falling for a second straight day versus the dollar. The Japanese currency is looking set to record its biggest weekly loss in more than a month as analysts are discounting any expectations of monetary tightening coming soon from the Japanese central bank.

As European markets were getting ready to commence their trading day, BoJ Governor Haruhiko Kuroda started giving his press conference explaining the Bank’s policy decisions. Among others, Kuroda said that “there’s some distance to achieving (the Bank’s) 2% inflation” target and that it will “take some time” for inflation to pick up, adding that at the moment it is inappropriate to discuss exiting the Bank’s ultra-loose monetary policy. As Kuroda talked dolar/yen rose to the two-week high of 111.37. Before his comments the pair was trading at 111.06.

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