BOJ Rate Hike Fails to Boost Yen as Dovish Sentiment Takes Hold

The Japanese yen experienced a significant decline on Friday, rising 0.7% to 157.13 yen after the Bank of Japan's interest rate hike.

The BOJ raised its policy rate by 25 basis points to 1.25%, its highest level since 1995, but this move was largely anticipated by markets.

Interest rate futures implied a 99% probability of the hike before the decision, making it a well-priced event.

The BOJ's rate-setting board did not reach a unanimous decision, with two members calling for a hold. These dissenting voices reflected a growing rift between Tokyo and the BOJ over accommodative financial conditions.