The Bank of Japan chose to maintain its current monetary policy during a meeting held on April 26, causing the Japanese yen to reach a 34-year low against the U.S. dollar. This decision by the central bank includes keeping the uncollateralized overnight call rate within the range of 0.0 to 0.1 percent, influencing the target for money market operations.
Following the announcement, investors responded by selling the yen and buying the dollar amid beliefs that the disparity in interest rates between Japan and the United States would not narrow any time soon. During the Tokyo foreign exchange trading on April 26, the Japanese currency reached a low of 156 yen against the dollar, the weakest level witnessed since 1990.
BOJ Governor Kazuo Ueda shared during a news conference that the recent depreciation of the yen had not notably impacted the underlying inflation rate thus far. Despite acknowledging that the effects of a weak yen tend to be short-lived, Ueda mentioned that the central bank will vigilantly monitor the situation to assess whether adjustments to monetary policy are warranted due to the yen's devaluation. Subsequently, the yen saw a further drop to 156.80 yen against the dollar during Ueda’s press briefing after he did not issue a definitive warning against the currency's loss of value.