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Yen poised to gain if Bank of Japan tightens policy

Currency traders watch interest rate spreads as central banks prepare to meet

The yen could strengthen beyond 110 to the dollar if the Bank of Japan raises interest rates at this week's meeting, some analysts argue.   © Reuters

TOKYO -- Monetary policy looks to dominate currency markets this week, with the yen likely to strengthen should the Bank of Japan signal a move away from its ultra-accommodative stance.

The BOJ adopted its yield curve controls in September 2016 to guide long-term interest rates around zero, and has remained steadfast on the policy ever since. Meanwhile, the U.S. Federal Reserve continues to steadily raise rates, with the European Central Bank also tightening monetary policy albeit at a slower pace.

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