BOJ Hikes Rates with Two Dissents, Yen Extends Declines
The Bank of Japan (BOJ) raised interest rates as expected, but two dissents from board members Toichiro Asada and Ayano Sato cast doubts on further policy tightening. The yen fell as much as 0.9% to 157.33 per US dollar after the decision.
The BOJ's rate increase was predicted by all economists surveyed by Bloomberg, but the vote was 7-2 against the two dissenting members. In a post-decision briefing, BOJ governor Kazuo Ueda stressed the need for caution about upside price risks and said decisions would be made after firm debate at each meeting.
Chidu Narayanan, chief Asia-Pacific strategist at Wells Fargo, stated that 'the outcome was not hawkish enough for markets and should push USD/JPY higher and front-end JPY yields lower.' He noted that the two dissents do not support market expectations of rapid rates hikes from the BOJ.