The yen lost 1% against the dollar on Monday around 08:00 GMT, while recent speculation about a more restrictive policy from the Bank of Japan (BoJ) from its next monetary decision on December 19 dissipated.
According to sources close to the BoJ interviewed by the Bloomberg agency, the institution sees no reason to end its negative short-term rate as of this month, as it is still waiting to verify whether a dynamic of wage increases will be put in place over the long term in Japan to support inflation in a virtuous manner.
Contrary speculation at the end of last week, following ambiguous remarks by BoJ Governor Kazuo Ueda and one of his deputies, had caused the opposite phenomenon, namely a clear appreciation of the yen against the dollar.
Around 08:20 GMT the dollar was trading for 146.22 yen, compared to 144.95 yen Friday at 21:00 GMT. The greenback rose a little earlier to 146.46 yen.
Unlike the American Federal Reserve (Fed) and many other central banks, which have sharply raised their key rates in the face of inflation since last year, the BoJ persists and signs in its determination to maintain a so-called ultra monetary policy. -accommodating, in order to support the Japanese economy which remains fragile.
And this even though inflation in Japan has been above its 2% target for more than a year and a half. The BoJ still believes that this situation is not sustainable, due to the weak growth in economic activity and wage increases in the country.
Over the past year, the BoJ has gradually made its control of ten-year Japanese bond yields more flexible, which it has authorized since the end of October to exceed their old ceiling of 1%.
But so far it has not touched its negative rate on bank deposits with it, which has been at -0.1% since 2016.