- The yen reversed gains as the Bank of Japan maintained its policy rate and continued the world's final negative-rate regime.
- Japan's yen sank 0.4% to its lowest level in over a week, while the Nikkei 225 Index rose as much as 1.3% to its highest level in two weeks. Shares in Hong Kong and mainland China sank as developer weakness continued to weigh on market morale.
- Officials at the Bank of Japan kept the policy rate at -0.1% but did not say whether they would scrap the policy the following week. Speculation had grown that the central bank will raise interest rates, with April considered as the most likely month, according to a study. Traders will keenly scrutinise Governor Kazuo Ueda's remarks to the press later Tuesday for signs on the Bank of Japan's future policy direction.
- According to Naka Matsuzawa, chief strategist at Nomura, the surge in the dollar-yen and Japanese stocks may be short-lived because speculation about policy changes will resurface in the run-up to the Bank of Japan's January meeting.
