BOJ Rate Hike Tempers Hawkish Wagers as Yen Weakens

Asian stocks rose on Friday as investors weighed global central bank efforts to combat inflation. The Bank of Japan (BOJ) added another rate hike, albeit with a dovish twist that pushed the yen lower.

The Japanese currency weakened about 0.7% to 157.1 per dollar after the BOJ raised rates to a 31-year high of 1.25%, but excited yen bears with two board members dissenting to the hike.

Fred Neumann, chief Asia economist at HSBC, said that 'the tone of the statement, along with two dissenters for the decision to raise rates, leaves lingering doubts that Japan's central bank will be cautious in tightening monetary policy further.'

The drop in the yen helped the Nikkei rise nearly 2%, while the Japanese 2-year government bond yields fell 4 basis points to 1.82%.