The Japanese yen sank on Wednesday after the Bank of Japan maintained ultra-low interest rates, disappointing some of the investors who had hoped the central bank would tweak its yield curve control policy further.

The central bank stunned the market last month by raising its cap on the 10-year yield to 0.5% from 0.25%, doubling the band it would permit above or below its target of zero. Since then, speculation has swirled that the BOJ was likely to tweak its yield curve control (YCC) policy further.

The Japanese yen
weakened 2.06% versus the greenback at 130.80 per dollar on Wednesday, its biggest one-day percentage drop since June. The dollar index, which measures the safe-haven dollar against six peers, rose 0.352% at 102.750.

The 10-year yield on Japanese government bond breached the BOJ’s ceiling for fourth straight session on Wednesday after the decision.

At a two-day policy meeting, the BOJ kept intact its yield curve control (YCC) targets, set at -0.1% for short-term interest rates and around 0% for the 10-year yield, by a unanimous vote.

The central bank also made no change to its guidance that allows the 10-year bond yield to move 50 basis points either side of its 0% target.

Some investors were betting the BOJ will be forced to adjust, or even dismantle, YCC on the view the central bank cannot sustain the massive volume of bond buying needed to defend the cap.

“The can has been kicked down the road and the attention will shift to the next meeting,” said Moh Siong Sim, currency strategist at Bank of Singapore. “It’s a question of when not if.”

The yen suffered broad losses. The euro gained 2% at 141.1 yen and sterling rose by more than 2% to 160.71 yen. The Australian dollar gained 2.2% and Singapore dollar rose 1.9%.

Against the U.S. dollar, sterling was last trading at $1.2261, down 0.22% on the day, while the euro was down 0.12% at $1.0775.

The Australian dollar rose 0.20% to $0.700, while the kiwi rose 0.45% to $0.646.