Yen Falls as BOJ Cuts Growth, Inflation Outlook

The Japanese yen fell sharply to the upper 144 level per US dollar after the Bank of Japan (BOJ) kept its policy interest rate unchanged at 0.5% and downgraded its economic growth and inflation forecasts, lowering the 2026 core CPI projection from 2.0% to 1.7%. The BOJ's dovish stance and concerns over global economic uncertainty and US tariffs weighed on the yen. The currency's decline triggered a rally in Tokyo's Nikkei 225, which rose for a sixth consecutive session as investors bought export-related stocks. Market speculation increased that any BOJ rate hike could be delayed further. US President Donald Trump's optimistic comments on progress in trade talks with Japan and other Asian economies reinforced dollar demand. Investors are monitoring BOJ Governor Kazuo Ueda's post-meeting remarks for clues on future policy.