Yen Remains Volatile as Ueda Reaffirms Tightening Path

The Japanese yen weakened past 157 per dollar on Friday, hitting two-week lows after the Bank of Japan raised interest rates in a widely telegraphed move, with two officials dissenting to the decision. The currency later pared its decline after Governor Kazuo Ueda said at the post-meeting press conference that the BOJ remains committed to raising rates and adjusting the extent of monetary accommodation based on changes in economic activity, prices and financial conditions. The central bank lifted its policy rate by 25 basis points to 1.25%, the highest since April 1995, as policymakers contend with persistent inflation and disruptions stemming from the Middle East. The hike was opposed by board members Toichiro Asada and Ayano Sato, highlighting some resistance to a quicker tightening cycle. Meanwhile, Japan’s core inflation eased to 1.7% in August from 1.8% in July, marking its first decline in four months.