The Bank of Japan kept its interest rates steady on Tuesday and said it would slow the pace of reduction in its bond purchases next year, signalling a cautious approach to unwinding its decade-long monetary stimulus.

The Bank of Japan’s decision to hold interest rates and slow its withdrawal from the bond market was widely expected and should help reassure investors, though there will still be plenty of interest in Governor Kazuo Ueda’s press conference,

USD/JPY rose as Trump and PM Ishiba did not agree to a trade deal, while slightsigns of easing geopolitical tensions also saw some unwinding of JPY longs while market expectation for BoJ to stand pat kept the pair broadly supported. USD/JPY was last at 144.81 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

The dollar firmed slightly on Tuesday though most currencies held tight ranges as investors remained spooked by ongoing tensions in the Middle East and awaited upcoming central bank decisions.

Following are excerpts from BOJ Governor Kazuo Ueda's comments at his post-meeting news conference, which was conducted in Japanese, as translated by Reuters: "It's desirable to continue tapering to allow yields to move more freely reflecting market forces. But tapering too rapidly could cause unintended impact on market stability."

TOKYO -- The Bank of Japan held its key interest rate steady on Tuesday following a two-day policy meeting, keeping its uncollateralized overnight call rate at 0.5% amid economic uncertainty stemming from U.S. trade policies. This marks the third ...

Global stocks slid and oil prices rose on Tuesday as fighting between Israel and Iran entered its fifth day, sowing fears of a broader regional conflict, while investors took in stride the Bank of Japan's decision to slow the pace of its bond tapering.