BOJ Stands Pat but Points to Higher Rates Ahead
On Friday the yen headed toward a third straight session of gains, following the Bank of Japan's decision to keep its benchmark rate at 1.25% — a move markets had broadly anticipated — while also lifting its inflation projection. The central bank underscored that policy has entered a more hawkish phase, with the possibility of raising rates about once every few months. The yen reached 157.89 against the dollar and was on course for a 0.11% advance in October.[S1][S2][S3][S4][S5][S6]
The BOJ decision closed a week in which several major central banks stood still. The European Central Bank, the US Federal Reserve and the Reserve Bank of New Zealand all left interest rates unchanged, choosing to wait as inflation remained stubborn and financial conditions tightened. The Bank of England and the Reserve Bank of Australia are due to draw attention the following week.[S1]
Dollar Slips as Treasury Yields and Tech Stocks Weigh
Investors often turn to the dollar when they seek safe-haven assets, but on Friday the pull from lower Treasury yields proved stronger. Earnings from Alphabet, Amazon and Intel this week revived concerns about spending on artificial intelligence, setting off a selloff in technology shares. The dollar index, which measures the US currency against six peers, slipped 0.02% to 101.86, though it was still up 0.39% in October for a second monthly advance.[S1][S5][S7]
Joseph Trevisani, a senior analyst at FXStreet, described the market as somewhat let down by the BOJ, noting that while the yen was firmer on the day it was not as strong as it had been, and that the Fed's bias continued to work against the BOJ's direction.[S1]
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Euro Under Pressure, Sterling and Aussie Dollar Firmer
The euro fell 0.17% to $1.1163 and was on course for a second consecutive monthly decline in October. It touched its weakest level since May 2025 on Thursday after the ECB held rates and suggested that higher bond yields had tightened financial conditions, which initially led traders to scale back expectations of a December increase. Barclays currency strategist Lefteris Farmakis said the AI-driven selloff had lent the euro some support by pressuring the dollar, but that the currency's strength could fade soon given slower euro zone growth compared with the United States.[S1]
Sterling rose 0.14% to $1.3394, and the Australian dollar gained 0.1% against the greenback to $0.7034. Bitcoin dropped 1.79% to $77,430.45 as investors withdrew money from digital assets following a hack at Binance, the largest cryptocurrency exchange, in which $6.3 billion was stolen, the biggest crypto theft on record.[S1]
