Yen steady before BOJ, AI jitters drive Treasury rally, weigh on dollar

The yen was little changed on Friday ahead of the Bank of Japan’s policy announcement, Business Recorder reported, with the central bank widely expected to leave its rate at 1.25%. Markets were pricing in about an 80% chance of a rate increase in December, despite expectations of a hawkish message. The yen traded near 157.815 per dollar and was on course to lose 0.2% against the dollar this month.

The European Central Bank, US Federal Reserve and Reserve Bank of New Zealand also left rates unchanged this week, while decisions by the Bank of England and Reserve Bank of Australia are due next week. A selloff in AI shares after Alphabet’s results revived concerns about spending and drove demand towards safer Treasury bonds, pulling US yields and the dollar lower. The 10-year Treasury yield stood at 4.8958%, while Brent crude futures were headed for an 11.5% monthly rise, their fourth consecutive gain.