The yen strengthened for the third consecutive day on Friday (October 30) after the Bank of Japan (BOJ) held interest rates steady at 1.25%. Although this decision was widely anticipated, the BOJ delivered a more hawkish signal by raising its inflation outlook and leaving the door open for potential rate hikes in the coming months.
The BOJ assessed that economic conditions remain sufficiently supportive to continue with policy normalization. Some analysts anticipate that interest rates could be raised in December, March, and July—eventually reaching 2%—before the central bank pauses to evaluate the impact of this tightening on the broader economy.
The yen was last up 0.11% at 157.51 per dollar, though it remains on track to post a decline for the month of October. The yen’s gains were also supported by a decline in U.S. Treasury yields, which narrowed the interest rate differential between Japan and the United States.
In Europe, the euro weakened by 0.12% to US$1.1168, putting it on course for its second consecutive monthly decline. The euro had earlier touched its lowest level since May 2025, following the European Central Bank’s (ECB) decision to keep interest rates unchanged and its indication that rising bond yields have effectively tightened financial conditions.
Meanwhile, the pound sterling rose 0.15% to US$1.3396, and the Australian dollar climbed 0.09% to US$0.70345. Both currencies remain on track to record gains for the month of October. Markets are now shifting their focus toward upcoming policy decisions from the Bank of England and the Reserve Bank of Australia next week.
The U.S. Dollar Index remained relatively stable at 101.90, staying on track for its second consecutive monthly gain. While the dollar faced pressure from falling Treasury yields, concerns regarding the scale of AI-related spending triggered a sell-off in technology stocks following earnings reports from Alphabet, Amazon, and Intel.
In the digital asset market, Bitcoin weakened by 2.61% to US$76,780.93, following a US$6.3 billion hack at Binance that heightened investor concerns. Meanwhile, the foreign exchange market is currently facing several catalysts stemming from central bank policies; the Bank of England (BOE) and the Reserve Bank of Australia (RBA) are the next in focus, following a series of decisions this week from the Bank of Japan (BOJ), the European Central Bank (ECB), and the Federal Reserve. (arl)
Source: Newsmaker.id