BOJ Rate Hike Triggers Yen Weakness Amid Global Economic Pressures

The Japanese yen has weakened to around 157 per dollar on Friday, reaching two-week lows after the Bank of Japan's interest-rate hike. The central bank increased its policy rate by 25 basis points to 1.25%, marking its highest level since April 1995. Policymakers are contending with persistent inflationary pressures and ongoing disruptions from the Middle East.

The decision was not unanimous, as board members Toichiro Asada and Ayano Sato voted against the increase. Attention now turns to the BOJ's guidance on further policy tightening, which analysts expect may struggle to match the pace of Federal Reserve rate increases.