U.S. Dollar Slumps Versus Yen After Bank Of Japan Policy Shift

(RTTNews) - The value of the U.S. dollar has shown a notable decline during trading on Tuesday, with the greenback showing a particularly steep drop against the Japanese yen.

The dollar is trading at 131.66 yen compared to the 136.91 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0622 compared to yesterday's $1.0607.

The U.S. dollar index has also moved lower on the day, falling 0.75 points or 0.7 percent to 103.97.

The weakness in the dollar comes after the Bank of Japan said it would review its yield curve control policy and widened its target band for interest rates.

Analysts said the surprise policy shift would allow long-term interest rates to rise more, raising fears of an eventual tightening in policy.

In U.S. economic news, the Commerce Department released a report showing a decrease in new residential construction in the U.S. in the month of November.

The report said housing starts fell by 0.5 percent to an annual rate of 1.427 million in November after tumbling by 2.1 percent to a revised rate of 1.434 million in October.

Economists had expected housing starts to decline by 0.7 percent to a rate of 1.415 million from the 1.425 million originally reported for the previous month.

The Commerce Department also said building permits plunged by 11.2 percent to an annual rate of 1.342 million in November after slumping by 3.3 percent to a revised rate of 1.512 million in October.

Building permits, an indicator of future housing demand, were expected to dive by 3.7 percent to 1.470 million from the 1.526 million originally reported for the previous month.