TOKYO: The yen slipped in Asia Wednesday after the Bank of Japan wrapped up a meeting with policymakers trimming their inflation expectations but holding off fresh easing, despite the economy slipping into recession.
In Tokyo, the dollar rose to a fresh seven-year high of 117.40 yen after the announcement, up from 116.83 yen in New York.
The euro also strengthened to 146.94 yen against 146.47 yen, while it edged down to $1.2516 from $1.2537 in US trade.
The yen's fall came after the BoJ kept policy unchanged -- it expanded its already huge stimulus package last month -- as investors eye bank governor Haruhiko Kuroda's press briefing later in the day.
Markets want to see what Kuroda says about the government's decision to delay a sales tax rise next year, after a levy hike in April slammed the brakes on growth just as the deflation-plagued economy appeared to be turning a corner.
"If (Kuroda) makes remarks critical of the domestic political scene, it could indicate the government and the BoJ is out of step and lead to some buying back of the yen," said Junichi Ishikawa, market analyst at IG Securities in Tokyo.
Minori Uchida, chief currency analyst at the Bank of Tokyo-Mitsubishi UFJ, said expectations of a weaker yen among investors were extremely high, and the currency was being oversold.
"The pair could see it rise to 118 yen in the short term," he told Dow Jones Newswires.
On Monday, official data showed that Japan's economy shrank 0.4 percent, or at an annualised rate of 1.6 percent, in the July-September quarter.
It was the second consecutive three months of decline, underscoring how the April tax rise dented growth and dealing a huge blow to Prime Minister Shinzo Abe's bid to turn around the laggard economy.
Abe on Tuesday said he was calling a snap election and delaying a second sales tax rise next year after the poor gross domestic product figures.
The dollar and euro drew support from upbeat data Tuesday that showed investment sentiment in Germany, the eurozone's biggest economy, rebounded in November, while in the United States, homebuilder confidence rose by four points to 58, according to the National Association of Home Builders/Wells Fargo Housing Market Index.
After hitting a 22-month low in October, the widely watched German investor confidence index calculated by the ZEW economic institute was back in positive territory in November, jumping to 11.5 points from minus 3.6 points the previous month.
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