Yen recovers against major peers, as Japan presses ahead with policy

The yen was up against 16 major peers after the Bank of Japan failed to cheer investors who had expected measures to curb volatility in the nation's bonds.

The Japanese currency recouped from a two-day decline against the dollar with the BOJ refraining from extending the maturity of loans to banks. Demand for the euro was curtailed as Germany's constitutional court took up a case against the European Central Bank's bond-buying plan, which got under way today.

Australia's dollar declined to an almost three-year low after data showed expansion of home-loan approvals under cut economists forecast.

The yen was continued at 98.79 per dollar at 8:30 am in Tokyo, after it fell 1.2 per cent yesterday.

According to some analysts, the BOK belied the hopes of those who had expected it to do something. They added, the near-term risk was still skewed to the downside for dollar-yen.

People had been very short yen against other Asian currencies and the likes of Aussie and kiwi, and there was risk of some those trades getting unwound further. A short is a bet on an asset price falling.

Meanwhile, the bank remained on course as it planned for a 60 trillion yen ($611 billion) to 70 trillion yen annual increase in monetary base, the central bank said following a two-day meeting today.

Meanwhile, stock markets, retreated today in Asia, with Japan's central bank ending a policy meeting without fresh stimulus, or moves to curb bond market volatility.

Emerging markets too came under pressure from the uncertainty, with mainland China's financial markets closing for a national holiday following the weekend release of disappointing data on the world's second largest economy.

Meanwhile, in a statement issued by the Bank of Japan called largely for the continuation of the policy changes even as it reiterated its expectation for a moderate recovery in coming month. The statement noted an improvement in exports and resilient demand in Japan.

The central bank, though came out with no new monetary easing or measures to curb volatility in government bond prices that had alarmed some in recent weeks.