Dollar Soars Against Yen After BOJ Rate Hike Decision Sparks Doubts

The US dollar rose against the Japanese yen after two Bank of Japan policymakers dissented from a widely expected decision to raise interest rates. This move raised doubts about further hikes, leading traders to feel that the BOJ's guidance was not explicitly hawkish.

The BOJ increased its benchmark rate to 1.25%, its highest level in 31 years, but this did not boost the yen as traders had expected. The dollar index rose 1.2% for the week, hitting a seven-week high after the US Federal Reserve hiked interest rates on Wednesday and signaled more increases could be coming.

Japanese Finance Minister Satsuki Katayama said that Tokyo won't hesitate to conduct further coordinated action with other countries to prop up the currency, following a joint US-Japan move in late July.