By John McCrank

NEWYORKJan 13 – The yen rises on Friday, adding to previous gains on speculation that the Bank of Japan (BOX) will revise its ultra-loose monetary policy, while the dollar rose against most of its peers, to recover from a seven-month low.

* The yen was up 1.06% against the dollar at 127.92 yen in 2000 Greenwich timeextended Thursday’s 2.4% gain as the Yomiuri newspaper said government officials BOX will review the side effects of yield curve control policies (YCC) at your meeting next week.

* the BOX It has been an exception in keeping stimulus going while most of the world’s major central banks are engaged in rate hike campaigns, but signs of more stubborn inflation and the possibility of higher wages have reassured some investors. YCC it could be reviewed, or even abandoned, as early as next week, opening the door for a stronger yen.

* “While next week’s hike looks unlikely, it is possible that BOX leave YCC then prepare to take off at the March or April meeting,” said Win Thin, global head of currency strategy at Brown Brothers Harriman.

* “This is a basic roadmap for tightening that the Fed has laid out very well,” he added.

* Yields on Japan’s 10-year government bonds surpassed the central bank’s new ceiling on Friday, increasing pressure for policy to control returns to be phased out or revised.

* The central bank said on Friday it would do more outright bond buying on Monday, ahead of a policy meeting scheduled for Jan. 17-18.

* “Our impact estimates of further BoJ monetary policy tightening suggest a yen appreciation of up to 2.7% is likely, but we believe the risk is a bigger backlash, potentially twice as big,” analysts on Barclays said in a note to clients.

* In general, better-than-expected German and UK economic data suggested both countries could escape recession, at least for now, but the news failed to provide any lasting impetus for either the euro or sterling.

* The euro was down 0.2% against the dollar at $1.0828, from a nine-month high earlier in the session. The pound was up 0.12% to $1.22275.

* The dollar index, which measures the greenback against a basket of currencies including the euro and yen, was up 0.02% at 102.22 as risk appetite faded, with mixed gains from American companies also setting the tone for markets.