Asian shares were mostly higher Thursday and the dollar rose to 130 yen after the Bank of Japan kept its near-zero interest rate stance unchanged.

Tokyo’s Nikkei 225 rose 1.75% to 26,847.90 as the Japanese central bank downgraded its outlook for the world’s third-largest economy to take into account rising energy costs and uncertainties raised by Russia’s invasion of Ukraine.

The dollar was trading at 128.43 yen late Wednesday. It started the year at about 115 yen.

Some Japanese officials have expressed concern over the yen’s weakness at a time when costs for imported oil, gas and other commodities are soaring. But the Bank of Japan says it intends to keep lending conditions ultra-lax to help support the sluggish economy even as the U.S. Federal Reserve raises interest rates to counter surging inflation, prompting investors to sell yen to seek higher returns in dollar-denominated assets.

In its summary of the outlook for the economy, the BOJ said the chief risks were coronavirus outbreaks and “extremely high uncertainties over developments in the situation surrounding Ukraine and the associated developments in commodity prices, global financial and capital markets, and overseas economies.”