Yen Weakens as BOJ Hikes Rates
The Japanese yen weakened to around 157 per dollar on Friday, touching two-week lows after the Bank of Japan delivered a widely anticipated interest-rate hike. The central bank lifted its policy rate by 25 basis points to 1.25%, its highest level since April 1995, as policymakers contend with persistent inflationary pressures and ongoing disruptions from the Middle East. The decision was not unanimous, however, with board members Toichiro Asada and Ayano Sato voting against the increase. Attention now turns to the BOJ’s guidance on the scope and timing of further policy tightening. Analysts have indicated that Japan’s tightening cycle may struggle to match the pace of Federal Reserve rate increases, following the Fed’s hawkish hike earlier this week. Meanwhile, Japan’s core inflation slowed to 1.7% in August from 1.8% in July, marking its first decline in four months.
The Japanese yen weakened to around 157 per dollar on Friday, touching two-week lows after the Bank of Japan delivered a widely anticipated interest-rate hike. 25%, its highest level since April 1995, as policymakers contend with persistent inflationary pressures and ongoing disruptions from the Middle East. The decision was not unanimous, however, with board members Toichiro Asada and Ayano Sato voting against the increase. Attention now turns to the BOJ’s guidance on the scope and timing of further policy tightening.
Analysts have indicated that Japan’s tightening cycle may struggle to match the pace of Federal Reserve rate increases, following the Fed’s hawkish hike earlier this week. 8% in July, marking its first decline in four months.