The US dollar rose to its highest level against the yen in nearly three weeks on Friday after a report said the Bank of Japan is considering expanding its negative rate policy to bank loans and could cut rates further. The BOJ could consider the new step if policymakers decide to lower the negative 0.1 percent interest rate applied to some bank reserves parked with the central bank, Bloomberg reported.
The dollar rose more than 1.7 percent against the yen to 111.42 yen, its highest level against the Japanese currency since April 4. For the week, the dollar was last on track to gain 2.5 percent against the yen, which would mark its strongest weekly gain since late October 2014. If the BOJ were to apply its negative rate policy to bank loans, it would allow the central bank to cut its deposit rates deeper into negative territory without acting as a headwind for the nation's banks, said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange Inc in Washington.