BoJ Rate Hike Fails to Boost Yen Amid Fed Tightening

The Bank of Japan (BoJ) has raised its benchmark interest rate to 1.25%, its highest level since April 1995, in a bid to combat inflation.

The decision comes as Japanese headline inflation held steady at 1.9% year-on-year in August, while core inflation decelerated slightly from 1.8% to 1.7%.

The BoJ's move is seen as a response to the Federal Reserve's restrictive monetary stance, with investors placing greater weight on US inflationary pressures than Japan's.

Despite the rate hike, the Japanese yen fell by 0.60% against the US dollar in a highly volatile session, closing at ¥156.85.