Yen gains as BoJ holds policy settings The yen was the biggest mover in the currency markets on Friday, making hefty gains against the dollar, the euro and sterling as the Bank of Japan opted for no further monetary easing. The dollar fell to its weakest level in 10 days against the Japanese currency, losing 0.8 per cent to hit Y78.76 after Japan's central bank ended its two-day meeting. Investor expectations that the Bank might ease monetary policy further had already faded in the build up to the meeting even as the International Monetary Fund said earlier this week it believed the yen was overvalued. The euro fell 0.8 per cent to Y99.48 while sterling fell 0.8 per cent to Y122.44. The pound regained earlier losses against the dollar and the euro after plans to boost bank lending in the UK were revealed on Thursday night by Sir Mervyn King, governor of the Bank of England. Sterling initially slid against other leading currencies in response to comments by Mr King that the case for further monetary easing had increased due to the weak global economic outlook. However, the pound was flat against the dollar at $1.5546 and flat against the euro at £0.8111 by mid-morning trading in London as investor attention turned to the Greek elections at the weekend. But foreign exchange analysts said the outlook for the pound - as well as other currencies - depended on both the outcome of the Greek election at the weekend and whether the US Federal Reserve will move to ease monetary policy in the US when it meets next week. "We think that the sterling reaction to the BoE measures will depend on the willingness of other global central banks to ease further going forward," said Valentin Marinov at Citigroup in London. The euro was flat against the dollar at $1.2624, having made small gains over the course of the week on cautious optimism that the outcome of the Greek election would be positive for the single currency. But analysts warned that the response of the euro to the outcome early next week was likely to be very volatile. "We have seen trading ranges narrow in recent days," said Kathleen Brooks at Forex.com. When ranges narrow this can precede a volatile move, so be prepared for an explosive reaction to the Greek election result on Sunday night.