The yen temporarily fell to the lower ¥158 range per dollar. Expectations of a US rate hike drove dollar buying, offsetting the effect of the BOJ's rate check. Long-term interest rates also continued to rise.
The yen weakened in the foreign exchange market, temporarily falling to the lower ¥158 range per dollar. This was its lowest level in about 3 weeks.
US economic indicators exceeded market expectations, strengthening expectations of an additional rate hike this year and accelerating yen selling and dollar buying.
Although the BOJ raised its policy rate, selling pressure on the yen intensified because 2 of the 9 committee members voted against the decision and the pace of future rate hikes was viewed as not having been clearly indicated. Views surrounding the BOJ's rate check then spread, but some market participants said its effect had been offset by the yen's depreciation this time.
In Japan's bond market, the rise in US long-term interest rates spread to domestic long-term interest rates, which reached their highest level in about 30 years. Market attention focused on developments against the backdrop of a widening US-Japan interest-rate differential.