Yen extends gains

The yen extended its gains in Asian trading Tuesday as the Japanese and US central banks kick off their latest policy meetings.

The Bank of Japan headed into a two-day gathering, with investors unsure about its plans for monetary policy as more than three years of stimulus has largely failed to boost growth and inflation.

More than a half of economists surveyed by Bloomberg News expect the BoJ to step up its easing efforts, with many betting it may opt to cut interest rates further into negative territory in a bid to spur lending by commercial banks.

The decision from the BoJ, which is also announcing a review of its policies, will come hours before the Federal Reserve winds up its own meeting, with opinion split on whether it will hike interest rates.

“No one is prepared to take on too much risk ahead of the Bank of Japan and the Fed Open Market Committee meetings,” said Chris Weston, chief market analyst in Melbourne at IG Ltd.

In Tokyo, the dollar edged down to 101.82 yen from 101.88 in New York Monday.

The euro was $1.1173 and 113.77 yen, against $1.1175 and 113.85 yen seen in New York.