Title: Dollar Down, Yen Fights its Way as BOJ Sticks to Dovish Policy

Mar 28, 2022 11:59PM ET

By: AnalysisWatch

The dollar was weaker in Asia on Tuesday morning. The yen struggled to regain its footing after its worst trading day in 16 months as the Bank of Japan (BOJ) kept bond yields low even as they surged elsewhere.

The U.S. Dollar Index, which tracks the greenback against a basket of other currencies, was down 0.01% at 99.045 at 11:49 PM ET.

The USD/JPY pair fell 0.46% to 123.33 after Japanese data released earlier in the day showed the jobs-to-applications ratio at 1.21 and the unemployment rate at 2.7% in February.

The AUD/USD pair fell 0.10% to 0.7480 after Australian retail sales rose 1.8% month-on-month in February. The NZD/USD pair rose slightly by 0.07% to 0.6999.

The USD/CNY pair fell 0.03% to 6.3700, while the GBP/USD pair rose 0.08% to 1.3094.

The Japanese currency fell as much as 2.4% against the dollar overnight, hitting its lowest level since August 2015, before recovering to 124.24 in volatile Asian trade. The US dollar remained broadly stable against other currencies, holding the euro at $1.0988 and ending the Australian dollar's recent rally.

The yen has lost almost 7% in March 2022 to date and almost 10% against the Australian dollar. However, the barely visible decline in Japanese government bond (JGB) yields is a sign that some investors doubt the longevity of Japan's dovish policies.

Japanese Finance Minister Shunichi Suzuki said earlier in the day that Japan would carefully monitor movements in the foreign exchange market to avoid an "unpleasing weakening of the yen".