BOJ Rate Hike Boosts Yen Despite Dovish Tone

Asian currencies were mixed on Friday as the yen weakened despite the Bank of Japan raising interest rates to a 31-year high. The Japanese currency's pair with the US dollar rose 0.7% to near 157 yen after the BOJ raised its policy rate by 25 basis points to 1.25% in a 7-2 vote.

However, two policymakers dissented in favor of keeping rates unchanged, tempering expectations for further tightening and giving the decision a dovish tone. Capital Economics analysts noted that with the two most hawkish Board members set to depart next July, 'the composition of the Board will probably become even more dovish.'

Markets were awaiting Governor Kazuo Ueda's press conference for clues on the timing and pace of further rate increases.