BoJ Dovish Rate Hike Fails to Boost JPY Amid Geopolitical Tensions

The USD/JPY pair has retreated from its two-week high, touched on Friday at 157.10, after the Bank of Japan's (BoJ) dovish rate hike failed to boost the Japanese Yen.

Although the BoJ raised short-term interest rates to a 31-year high and reaffirmed its commitment to further rate hikes, the 7-2 vote split and easing inflation data in August tempered expectations for an aggressive tightening cycle.

This has led to a divided market, with some bulls hesitant to place bets amid ongoing geopolitical tensions in the Middle East and growing risk of regional conflict.

The US Federal Reserve's (Fed) hawkish outlook, signaling at least one more rate hike this year, continues to support the Greenback and USD/JPY pair.