BOJ maintains ultra-low rates, warns it is closely watching yen moves

The dollar rose more than 1 yen to hit as high as 134.64 yen when the policy decision was released, before paring its gains in volatile trading

The Bank of Japan maintained ultra-low interest rates on Friday and its guidance to keep borrowing costs at "present or lower" levels, signaling its resolve to focus on supporting the economy's recovery from the COVID-19 pandemic, Qazet.az reports.

However, in a nod to the hit that the yen's recent sharp declines may have on the economy, central bank said it must "closely watch" the impact exchange-rate moves could have on the economy.

At the two-day policy meeting that ended on Friday, the BOJ maintained its -0.1% target for short-term rates and its pledge to guide the 10-year yield around 0% by a 8-1 vote.

The decision was widely expected, but leaves the BOJ's stance even more at odds with other major central banks, which are aggressively tightening policy to curb surging inflation.

The central bank also left intact guidance that short- and long-term interest rates were expected to remain at "present or low levels."

The dollar rose more than 1 yen to hit as high as 134.64 yen when the policy decision was released, before paring its gains in volatile trading.

Central banks across Europe raised interest rates on Thursday, some by amounts that shocked markets, in the wake of the U.S. Federal Reserve's 75-basis-point hike.