BoJ Hikes Rates, Yen Falls Amid Fed-Inspired Concerns

The Bank of Japan (BoJ) raised its benchmark interest rate by 25 basis points to 1.25%, its highest level since April 1995, in a bid to prevent inflation from overshooting the 2% target.

Despite this historic hike, the Japanese yen depreciated by 0.60% against the US dollar, with the USD/JPY pair closing at ¥156.85.

Market participants appear to be placing greater weight on the Federal Reserve's restrictive monetary stance than on the BoJ's hawkish posture, suggesting that they view inflationary pressures as more acute in the US than in Japan.