Dollar stands steady near one-week high against yen; BOJ stands pat

The dollar traded near a oneweek high against the yen on Thursday, supported by a rise in US bond yields and showing limited reaction after the Bank of Japan (BOJ) kept interest rates steady as expected.

The dollar held steady at 113.40 against the yen, clinging near Wednesday’s high of 113.47 yen, its strongest level since December 13.

A rise beyond last week’s high of 113.75 yen would send the dollar to its highest point in more than a month.

In a widely expected move, the BOJ maintained the 0.1 percent interest it charges on a portion of excess reserves that financial institutions park at the central bank. It also maintained its yield target for 10-year Japanese government bonds around zero percent.

Analysts said the dollar was supported against the yen after the US 10-year Treasury yield rose to a nine-month high on Wednesday as investors worried over whether a US tax overhaul including tax cuts would lead to higher US debt, increased bond issuance and more aggressive rate hikes by the Fed.

The Republican-controlled US House of Representatives gave final approval on Wednesday to the biggest overhaul of the US tax code in 30 years, sending a sweeping bill to President Donald Trump to sign.

The euro held steady at $1.1866, having gained around 1 percent so far this week. Analysts say a rise in German bond yields this week has helped underpin the euro.

Against the yen, the euro was little changed at 134.56 yen. On Wednesday, the euro had risen to as high as 134.76 yen, its strongest level against the yen since October 2015.