Dollar Surges Past 157.90 on BoJ's Divided Hike

The dollar surged to a two-week high against the yen after the Bank of Japan's (BoJ) divided rate hike failed to lift the currency.

USD/JPY rose 1.2% to 157.897, its biggest daily gain since December, as traders repriced the BoJ's path and weighed in on broad dollar strength following the Federal Reserve's hike.

The BoJ raised its policy rate by 25 basis points to 1.25%, the highest level since 1995, but two board members dissented in favor of a hold, casting doubt on whether future hikes will face more resistance or less.

Japan spent a record ¥15.4 trillion to support the yen between July 30 and August 26, capping USD/JPY near 160.00, and Tokyo has shown it will act when the yen weakens too far.