BoJ Split Vote Sends Japanese Yen Plummeting Again

The Japanese yen has continued its downward trend after the Bank of Japan's (BoJ) split vote on interest rate increases. On September 18, the BoJ raised its interest rate to 1.25% from 1%, but two board members, Asada and Sato, voted against the decision. They argued that inflation under 2% and an economy that hasn't sped up enough don't justify an increase.

The yen fell despite the rate hike, with USD/JPY trading just below 157.50 after a fifth session in six of rises. The Bank of Japan's rate is now 2.50 to 2.75 points lower than the Federal Reserve's (Fed) rate of 3.75-4.00%, which has been steady since September 16.

Japan bought ¥15.4 trillion worth of yen between July 30 and August 26, its largest monthly amount on record. The US also joined in buying yen on July 31 for the first time since 1998, but USD/JPY had already reached just under 164.00 in July.