Yen Falls to 156 as Fed Hike Widens Rate Gap

The yen has fallen against the dollar in New York foreign exchange trading, weakening to as low as 156.42 per dollar on the 16th.

This move came shortly after the Federal Reserve announced its monetary policy decision and heightened expectations for additional rate hikes, which have renewed focus on the widening interest rate differential between the US and Japan.

The Federal Reserve raised its benchmark policy rate by 0.25% on the same day as the yen's decline, with policy rate projections suggesting further hikes before year-end. Chair Warsh emphasized a strong commitment to curbing inflation at his press conference, reinforcing market views that the rate-hike cycle will continue for now.

As of 5 p.m., the yen stood at 156.27-37 per dollar, down 1.22 yen from the previous day. Market participants anticipate further upside in the dollar-yen pair ahead of the Bank of Japan's monetary policy meeting this weekend, with some expecting the pair to reach the 158.40 level near its 200-day moving average.