Investing.com - Investing.com - The yen strengthened across the board on Tuesday after the Bank of Japan kept monetary policy unchanged at the outcome of its latest policy review as investors began to turn their attention to the Federal Reserve's meeting, set to begin later in the day.
USD/JPY fell 0.68% to 113.05, while EUR/JPY was down 0.73% at 125.45.
The yen was boosted after the BoJ made no change to monetary policy, in a widely anticipated decision, as it assesses the economic impact of its decision in January to deploy negative interest rates.
The move, which did little to weaken the yen, has been widely criticized and has contributed to the growing view that the BoJ's loose monetary policy measures are losing their effectiveness.
The BoJ maintained its ¥80 trillion base money target and a 0.1% negative interest rate it applies to some reserves.
But the bank also flagged weakness in exports and output due to slowing growth in emerging economies, indicating that more stimulus may be needed in the future.
The gloomy assessment of the global economy weighed on risk appetite, further boosting demand for the safety of the yen.
Investors were turning their attention to the conclusion of the Fed's two day policy meeting on Wednesday, with most investors expecting no change given recent signs of weakness in the global economy.
But the U.S. central bank was likely to signal that rates will rise fairly soon as long as U.S. inflation and jobs continue to strengthen.
Most economists are now expecting the first rate hike of this year in June.
The Fed hiked rates in December for the first time since 2006 and projected four rate increases during 2016.
Fed Chair Janet Yellen's post policy meeting news conference will be closely watched for clues about interest rates' future path.
The euro ticked lower against the dollar, with EUR/USD dipping 0.08% to 1.1093.
The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was up 0.25% at 96.83.
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