Although the Bank of Japan implemented a 0.25% rate hike, expectations for further hikes receded after the vote was split 7 in favor to 2 against. The yen briefly fell to the upper ¥157 range, while the Nikkei 225 rebounded in Tokyo trading.
In Tokyo foreign exchange trading on the 18th, the yen fell against the dollar, briefly weakening to the upper ¥157 range per dollar. Although the Bank of Japan raised its policy rate by 0.25 percentage points to 1.25%, expectations for the pace of further rate hikes receded after 2 policy board members, Asada (浅田) and Sato (佐藤), voted against the decision. Yen selling intensified.
At 5 p.m., the yen was quoted at ¥157.48–50 per dollar and the euro was at ¥180.87–91 against the yen. The Nikkei 225 ended trading ¥882.70 higher than the previous day at ¥65,018.95. August's consumer price index came in below market expectations, weighing on the yen.
The yen's decline is believed to have accelerated as several factors overlapped, including expectations of US rate hikes, weak domestic prices and the presence of dissenting views at the Bank of Japan. The market is carefully watching when the Bank of Japan may announce further rate hikes and how far the yen may appreciate.