The Bank of Japan maintained its ultra-loose policy settings as expected, as it opted to await more evidence on whether wages and prices would increase enough to justify a shift away from massive monetary stimulus

The U.S. dollar soared against the yen on Tuesday after the Bank of Japan gave no sign that its ultra-loose monetary policy was set to end, but the dollar was broadly weaker against other majors, weighed down by expectations for interest rate cuts next year.

The Bank of Japan maintained its ultra-loose policy settings as expected, as it opted to await more evidence on whether wages and prices would increase enough to justify a shift away from massive monetary stimulus.

The BoJ also made no change to its dovish policy guidance, dashing hopes among some traders it would tweak the language to indicate a near-term end to negative interest rates.

Traders are pulling back on a move into positive rate territory from the BoJ into early new year, said Karl Schamotta, chief market strategist at Corpay in Toronto.

There was no indication in the press conference or in the statement that policymakers are ready to raise rates dramatically, Schamotta added.

The dollar was 0.76 per cent higher against the yen at 143.89 yen. Through Monday, the dollar had pulled back nearly 3.7 per cent against the yen this month, hurt by wider dollar weakness and also as traders stepped up yen-buying on speculation of a Bank of Japan policy shift.

Meantime, the dollar continued to struggle against most major peers as traders sold the U.S. currency on expectations that the Federal Reserve is about to start cutting rates as early as March.

The dollar index was 0.35 per cent lower at 102.13. The index has slipped 1.5 per cent over the last week.

The risk-sensitive Australian and New Zealand dollars stood near their highest in around five months, further beneficiaries of the weakening dollar.

The Aussie was up 0.95 per cent at $0.677, its highest since late July.

The kiwi gained 0.84 per cent to 0.6264.

The pound added 0.68 per cent, helped by the dollar’s wider weakness and as investors increasingly talked up sterling as a hot prospect for next year.