The yen is coming under renewed pressure as a powerful earthquake that hit Japan on New Year’s Day makes it harder for the Bank of Japan to abolish negative interest rates this month.

Morgan Stanley MUFG Securities changed its call for the BOJ rate decision this month and now sees it leaving current policy in place, partly as the central bank has to assess the adverse impact from the Noto Peninsula disaster on the economy. While speculation about a January tweak is receding, many still expect an end to negative rates in April, or later in 2024.

The yen weakened to as low as ¥145.36 per dollar on Friday in Tokyo, from ¥141.04 at the end of 2023 in New York trading. The Japanese currency had been widely expected to strengthen in 2024 on speculation the Federal Reserve would start cutting interest rates in the first half of the year, while at the same time normalization of ultraeasy monetary policy in Japan would narrow the yield gap between the two economies.