BOJ Rate Hike Fizzles: Dollar Surges Against Yen

The US dollar surged against the yen on Friday after two Bank of Japan policymakers dissented from a widely expected interest rate hike. This move raised doubts among traders about further hikes, despite the BOJ pushing rates to their highest level in 31 years at 1.25 percent.

However, the decision did not boost the Japanese currency as traders felt there was a lack of explicitly hawkish guidance. The US dollar rose 1.2 percent against the yen to a two-week high of 157.897 yen after wavering during BOJ Governor Kazuo Ueda's press conference.

Steven Englander, head of G10 FX research at Standard Chartered, said that 'the lack of hiking punch makes it easier for USD to go higher.' Ray Attrill, head of FX strategy at National Australia Bank in Sydney, added that the BOJ 'just clearly underwhelmed versus expectations here.'