BoJ Rate Hike Fails to Strengthen Yen Amid Dovish Decision

The Japanese Yen remained weak near its two-week low after the Bank of Japan's (BoJ) decision to raise interest rates by 25 basis points in a split vote. The move was accompanied by dissent from two board members, Toichiro Asada and Ayano Sato, who argued for patience in pushing up borrowing costs.

The BoJ expects inflation to stay above target in the coming years, despite core inflation remaining below its 2% annual target. This has tempered expectations of a more aggressive tightening, which continues to undermine the Japanese Yen (JPY) and support the USD/JPY pair.

Data released earlier showed that Japan's National Consumer Price Index (CPI) held steady in August, further reducing pressure on the BoJ to raise rates. The US Dollar (USD), however, attracted dip-buyers following the previous day's modest pullback from its highest level since late July in the wake of the Federal Reserve's (Fed) hawkish outlook.