By Rae Wee
SINGAPORE (Reuters) -The yen was choppy after the Bank of Japan (BOJ) delivered a widely anticipated rate hike on Friday, while the Australian and New Zealand dollars surged on comments from U.S. President Donald Trump suggesting a softer stance on tariffs against China.
The BOJ raised rates by 25 basis points at the conclusion of its two-day policy meeting, in a move that had been well telegraphed by policymakers prior to the outcome.
The yen swung between losses and gains in choppy trade shortly after the decision to end up little changed at 156 per dollar.
Focus now turns to BOJ Governor Kazuo Ueda’s post-meeting briefing later in the day for clues on the pace and timing of further increases.
The euro was last 0.08% higher at 162.71 yen, paring some gains from earlier in the session, while sterling ticked up 0.17% to 192.99 yen.
Earlier on Friday, data showed Japan’s core consumer prices rose 3.0% in December from a year earlier to mark the fastest annual pace in 16 months.
Elsewhere, the Australian and New Zealand dollars were riding high from Trump’s interview with Fox News aired on Thursday evening, where he said he would rather not have to use tariffs over China and that he thought he could reach a trade deal with the world’s second-largest economy.
The Aussie jumped more than 0.5% to reach a five-week top of $0.6321, while the kiwi similarly scaled a five-week peak of $0.5708.
The two Antipodean currencies are often used as liquid proxies for the Chinese yuan.
“It’s still early days, although it looks like he prefers to negotiate with China first and perhaps come to a deal, rather than to use tariffs,” said Sim Moh Siong, a currency strategist at Bank of Singapore.
“If he goes down the route of holding back on tariffs but instead coming to a deal with China, then you could see more relief coming through in terms of the Asian currencies as well as the Aussie and the kiwi.”
The Chinese yuan similarly got a lift on the back of Trump’s remarks, with the onshore unit rising to its strongest level in over a month at 7.2450 per dollar.
Its offshore counterpart also peaked at its highest since Dec. 11 at 7.2519 per dollar.
DOLLAR BLIP
In the wider market, the dollar fell broadly following Trump’s latest comments on China tariffs and was headed for its worst weekly fall in two months.
Investors have rushed to sell the dollar in the wake of Trump’s inauguration after his widely expected tariff announcements did not immediately materialise, unlike what he had threatened during his campaign.