The yen fell versus its major peers as the Bank of Japan began a two-day monetary policy meeting amid speculation Governor Haruhiko Kuroda will expand stimulus this year to counter the drag from a planned sales tax increase.
Japan’s currency weakened against the dollar, ending a three-day advance, as Asian stocks gained, reducing demand for haven assets. The Bloomberg Dollar Spot Index rose for a sixth day as signs of U.S. economic growth backed the case for the Federal Reserve to pare bond purchases. New Zealand’s dollar remained higher after the nation’s inflation accelerated more than economists forecast, supporting the view that the Reserve Bank will tighten policy.
“The dollar-yen is very compelling, because you’ve got a situation of diverging policies,” said Stan Shamu, the Melbourne-based market strategist at IG Ltd. “With that sales tax hike kicking in from April, the BOJ might look to reaffirm its position with regard to stimulus.”