BOJ Rate Hike Falls Short, Triggers Yen Sell-Off Amid Intervention Fears

The Bank of Japan (BOJ) raised its policy rate to 1.25% on Friday, September 18, in line with expectations.

However, the decision was not unanimous, with Board members Toichiro Asada and Ayano Sato casting dissenting votes.

The BOJ's Governor Kazuo Ueda said that the stage of monetary policy making has shifted, but acknowledged it is difficult to determine the terminal rate for this tightening cycle.

In response to the rate hike, the Japanese yen initially fell rather than rallied, briefly tumbling to a two-week low of ¥158 per dollar, before paring its losses after reports emerged that the BOJ had conducted a 'rate check' with currency market participants.