FOREX-Yen choppy after BOJ hikes rates; yuan, Antipodean peers rise on Trump comments

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Yen volatile following BOJ rate hike

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Aussie, kiwi dollars jump on Trump's comments over China tariffs

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Dollar eyes worst week since November

(Updates with BOJ decision, prices throughout)

By Rae Wee

SINGAPORE, Jan 24 (Reuters) - The yen was choppy after the Bank of Japan (BOJ) delivered a widely anticipated rate hike on Friday, while the Australian and New Zealand dollars surged on comments from U.S. President Donald Trump suggesting a softer stance on tariffs against China.

The BOJ raised rates by 25 basis points at the conclusion of its two-day policy meeting, in a move that had been well telegraphed by policymakers prior to the outcome.

The yen swung between losses and gains in choppy trade shortly after the decision to end up little changed at 156 per dollar.

Focus now turns to BOJ Governor Kazuo Ueda's post-meeting briefing later in the day for clues on the pace and timing of further increases.

The euro was last 0.08% higher at 162.71 yen, paring some gains from earlier in the session, while sterling ticked up 0.17% to 192.99 yen.

Earlier on Friday, data showed Japan's core consumer prices rose 3.0% in December from a year earlier to mark the fastest annual pace in 16 months.

Elsewhere, the Australian and New Zealand dollars were riding high from Trump's interview with Fox News aired on Thursday evening, where he said he would rather not have to use tariffs over China and that he thought he could reach a trade deal with the world's second-largest economy.

The Aussie jumped more than 0.5% to reach a five-week top of $0.6321, while the kiwi similarly scaled a five-week peak of $0.5708.

The two Antipodean currencies are often used as liquid proxies for the Chinese yuan.

"It's still early days, although it looks like he prefers to negotiate with China first and perhaps come to a deal, rather than to use tariffs," said Sim Moh Siong, a currency strategist at Bank of Singapore.

"If he goes down the route of holding back on tariffs but instead coming to a deal with China, then you could see more relief coming through in terms of the Asian currencies as well as the Aussie and the kiwi."

The Chinese yuan similarly got a lift on the back of Trump's remarks, with the onshore unit rising to its strongest level in over a month at 7.2450 per dollar.

Its offshore counterpart also peaked at its highest since Dec. 11 at 7.2519 per dollar.

DOLLAR BLIP

In the wider market, the dollar fell broadly following Trump's latest comments on China tariffs and was headed for its worst weekly fall in two months.

Investors have rushed to sell the dollar in the wake of Trump's inauguration after his widely expected tariff announcements did not immediately materialise, unlike what he had threatened during his campaign.

The greenback extended losses from earlier in the session to fall 0.23% to 107.89 against a basket of currencies, and was set to lose 1.4% for the week.

"What you're seeing right now in terms of the dollar pullback is a reflection that there's been some tariff risk premium that's been priced in the dollar, and now the market is pricing (that) out," said Bank of Singapore's Sim.

The euro, meanwhile, rose 0.24% to $1.0441 and was headed for a roughly 1.7% weekly gain, its best since November 2023.

Sterling advanced 0.32% to $1.2391 and was similarly poised for a rise of 1.8% for the week, snapping three straight weeks of losses.

Also adding to headwinds for the dollar were comments from Trump demanding that the Federal Reserve cut interest rates, arguing he understands monetary policy better than those charged with setting it.

"The Trump comments ... are a reminder that we're just going to have this constant source of volatility coming from off-the-cuff comments, and of course, it does on paper challenge a little bit of that Fed independence," said Rodrigo Catril, senior FX strategist at National Australia Bank.

Trump's remarks come just days before the Fed's first policy meeting to be held during his administration, with very broad expectations officials will leave rates unchanged.

In cryptocurrencies, bitcoin was last 0.51% higher at $103,648.55, while ether gained 1.75% to $3,305.51.

Trump on Thursday ordered the creation of a cryptocurrency working group tasked with proposing new digital asset regulations and exploring the creation of a national cryptocurrency stockpile, making good on his promise to quickly overhaul U.S. crypto policy.

(Reporting by Rae Wee; Editing by Jacqueline Wong and Shri Navaratnam)