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The dollar weakened to around ¥107.20 in Tokyo trading Monday, after the Bank of Japan decided to ease monetary policy further to fight the coronavirus pandemic.

At 5 p.m., the dollar stood at ¥107.22-22 , down from ¥107.69-69 at the same time Friday. The euro was at $1.0841-0842, up from $1.0740-0741, and at ¥116.24-25, up from ¥115.66-68.

The dollar was pushed up to around ¥107.60 by Japanese importers by midmorning after trading below ¥107.50.

But after the BOJ’s policy-setting meeting, the greenback came under selling pressure vis-a-vis the yen, though the central bank shifted to unlimited purchases of Japanese government bonds to expand liquidity even further.

Speculation grew that the BOJ was more interested in acting to keep any drop in domestic interest rates smaller than that in U.S. rates, resulting in a narrower Japan-U.S. rate gap, market sources said.

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