By Hiroyuki Kachi

The yen was weaker against its rival currencies during Asian trade on Tuesday, as investors opted to offload the safety of the Japanese currency.

Around 0450 GMT, the U.S. currency was trading at Y117.58, compared with Y117.09 late Monday in New York. The euro strengthened to Y122.29 midday from Y121.87. The Japanese currency was weaker than peers such as the Australian dollar and the British pound.

As widely expected, the Bank of Japan decided to stand pat on monetary policy by keeping its short-term rate target at minus 0.1% and its 10-year Japanese government bond yield target at around zero. It also said it would continue to buy Japanese government bonds at the previous pace of around 80 trillion yen a year.

But the central bank raised its assessment of the economy for the first time since May 2015 by saying that the world's third largest economy "has continued its moderate recovery trend."

"There was no surprise," said Marito Ueda, director at FX Prime byGMO.

Although the policy decision was uneventful, the accommodative policy stance gave investors a feeling of relief, prompting short covering of the dollar against the yen midday, said Mr. Ueda. Tokyo stocks were higher after the policy decision with the Nikkei Stock Average rising 0.5% midday.

Earlier in the Asia session, many had been taking a wait-and-see stance given the geopolitical uncertainties overnight. Russia's envoy to Turkey was shot and killed in Ankara during a gallery opening in the capital, while a truck plowed into a popular Christmas market near one of Berlin's prime tourist sites. Investors usually buythe safety of the Japanese currency at the time of geopolitical and financial instability.

Investors are now shifting their focus to BOJ Gov. Haruhiko Kuroda's remarks at his press conference scheduled to start at 0630 GMT on how the central bank will cope with rising JGB yields.

"We would like to pay attention to any hints about how the BOJ is putting its policy focus," said J.P. Morgan in a note. Possible policy implications are: massive buying of Japanese government bonds of more than Y80 trillion annually to check rising yields, a move considered as dovish to cause a weaker yen. To raise target for long-term rates from efforts to keep the 10-year yield near zero, a hawkish move to potentially cause a stronger yen and to tolerate higher yields without altering long-term rates target.

The WSJ Dollar Index, a measure of the U.S. dollar against a basket of major currencies, was up 0.08% at 93.28. The euro was unchanged at $1.0400 from $1.0402 late Monday.

Interbank Foreign Exchange Rates At 23:50 EST / 0450 GMT

Latest Previous %Chg Daily Daily %Chg

Dollar Rates Close High Low 12/31

USD/JPY Japan 117.58-59 117.09-10 +0.41 117.61 116.99 -2.26

EUR/USD Euro 1.0400-03 1.0401-04 -0.01 1.0419 1.0395 -4.23

GBP/USD U.K. 1.2394-96 1.2394-96 0.00 1.2410 1.2376 -15.89

USD/CHF Switzerland 1.0274-78 1.0269-73 +0.05 1.0289 1.0260 +2.55

USD/CAD Canada 1.3410-15 1.3407-12 +0.02 1.3414 1.3396 -3.08

AUD/USD Australia 0.7250-54 0.7242-46 +0.11 0.7260 0.7240 -0.48

NZD/USD New Zealand 0.6926-32 0.6926-32 0.00 0.6935 0.6915 +1.40

Euro Rate

EUR/JPY Japan 122.28-32 121.79-83 +0.40 122.36 121.74 -6.49

Source: Tullett Prebon

Writeto Hiroyuki Kachi at Hiroyuki.Kachi@wsj.com

(END) Dow Jones Newswires

December 20, 2016 00:28 ET (05:28 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.