On Thursday the greenback dropped versus the Japanese currency in Asia as the Bank of Japan stood pat on policy - a move which disappointed some investors who awaited an additional easing as a chance for the dollar to strengthen.
Meanwhile, the New Zealand dollar was lower against the dollar, as the Reserve Bank of New Zealand also decided to stand pat on its policy, signalling the possibility of upcoming rate cuts.
The buck had been vulnerable overnight against the yen, after a lackluster U.S. growth reading clouded the likely timing of a Federal Reserve rate increase.
The U.S. dollar was at ¥118.66, compared with ¥119.05 late Wednesday in New York.
The BOJ decision also hastened a fall in Japanese stocks, pushing down the Nikkei Stock Average by 2.5% and encouraging further moves into the safe-haven yen.
There was a growing speculation among some investors expecting a surprise easing decision reminiscent of the BOJ’s move in late October. That easing decision pushed the dollar to ¥112.47 from ¥109.22.
However, as it had been expected, the central bank left its policy unchanged Thursday, sticking to the view that Japan is still on track to achieve 2% inflation despite stagnating price growth and the lingering speculation that further action is needed.
The regulator decided to keep its annual asset purchases at ¥80 trillion ($672.2 billion), ignoring a call from an influential lawmaker urging the bank to increase its purchases to ¥90 trillion.
The BOJ decision prompted the dollar to fall to as low as ¥118.54 midday.
New Zealand’s central bank also stood pat on policy, prompting a fall in the New Zealand dollar.
In a widely expected move, the RBNZ held its benchmark interest rate at 3.50% but said it could lower borrowing costs in the future.
"The bank expects to keep monetary policy stimulatory and is not currently considering any increase in interest rates," RBNZ Governor Graeme Wheeler said.
NZD/USD hit 0.7594 during late Asian trade, the pair's lowest since April 27; the pair subsequently consolidated at 0.7591, declining 1.23%.
Also Thursday, Statistics New Zealand reported that building consents
increased by 11.0% in March, after a 6.3% decline the previous month, Investing.com reports.
