Investing.com - The yen gained ground against the dollar and the euro on Wednesday after the Bank of Japan kept monetary policy unchanged at its policy meeting despite recent economic reports pointing to weakness in Japan’s economy.
USD/JPY was down 0.18% to 119.99 from overnight highs of 120.35.
The BoJ refrained from expanding its stimulus program but there is still speculation the central bank could ease monetary policy at its October meeting.
Data last month showed that core inflation in Japan fell in August for the first time since the BoJ launched its $1.4 trillion quantitative easing program in 2013 in a bid to bolster growth and end years of deflation.
The euro was lower against the yen, with EUR/JPY down 0.47% to 134.88.
The single currency was also weaker against the dollar, with EUR/USD at 1.1237, off 0.31% for the day.
The euro came under pressure after data showing that German industrial production fell at the fastest rate in a year in August, adding to concerns that a slowdown in global growth is spreading to the euro area’s largest economy.
German industrial output fell 1.2% from a month earlier, missing forecasts for a 0.2% increase.
The report came a day after data showing that German factory orders unexpectedly fell 1.8% in August.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.16% to 95.69.
The dollar’s gains were held in check by diminished expectations for a rate hike by the Federal Reserve this year in the wake of last Fridays unexpectedly weak U.S. jobs report for September.