Japan's central bank (BOJ) maintained its ultra-loose monetary policy as widely expected, further widening its gap with other major global central banks.
At its policy meeting on Thursday, the central bank decided to set interest rates at -0.10% and target the 10-year Japanese government bond yield at around 0%.
The decision comes after the Federal Reserve (Fed) decided to raise interest rates by 75 basis points and hinted that more increases are on the way.
Following that, the yen sank to a new 24-year low, touching 145.00 against the US dollar.
Fed policymakers expect the Japanese economy to experience downward pressure due to high commodity prices due to the protracted war in Ukraine.
However, the economy is likely to recover as the effects of the Covid-19 outbreak and supply chain disruptions subside.
Markets have been focusing on whether the BOJ will give early signs of a change in its policy approach by changing its pledge to keep interest rates on hold and increase stimulus as needed by the economy.
Governor Haruhiko Kuroda is expected to address a press conference to explain this decision shortly.
