Yen Tumbles After BOJ Hike Fails to Stop Slide

The Japanese yen weakened on Friday after the Bank of Japan (BoJ) raised interest rates as expected, but failed to halt its decline. The currency fell as much as 0.8% to 157.145 yen per dollar, its weakest level since September 3. This move was not unanimous, with two board members voting to keep policy unchanged.

Ray Attrill, head of FX strategy at National Australia Bank in Sydney, said the BoJ 'clearly underwhelmed versus expectations' and that the lack of a unanimous vote 'raised eyebrows in the market'. Core inflation in Japan held steady near the central bank's target of 2% in August, highlighting persistent price pressures.

Attention now turns to Governor Kazuo Ueda's press conference, where he will explain the central bank's decision. Market participants will be looking for confirmation that further normalization remains on the table and assessing whether the Bank sees any urgency to move again.