The dollar surged into the mid-¥157 range in Tokyo trading on the 18th. The decline in expectations for further Bank of Japan rate hikes and the outcome of its policy meeting were cited as the factors behind the move.
The dollar rose sharply to the mid-¥157 range against the yen in Tokyo foreign exchange trading on the 18th, as expectations for an acceleration in the Bank of Japan's pace of future rate hikes receded. As of 5:00 p.m., the dollar was quoted at ¥157.49–¥157.49, up ¥1.81 from the previous day, marking a substantial dollar gain and yen decline.
The dollar had been trading around ¥155.90–¥156.10 in the early morning Tokyo session, but rose into the ¥156.30 range toward the Tokyo fixing. The below-market consensus reading for August's national consumer price index was also seen as a factor behind yen selling.
The Bank of Japan raised its policy rate from the current 1% to 1.25%, but Policy Board members Asada Toichiro (浅田統一郎) and Sato Ayano (佐藤綾野) voted against the move. Some market participants said uncertainty over future rate hikes had increased.
The dollar then surged into the upper ¥156 range before coming under some selling pressure, and subsequently traded around ¥157. At a press conference, BOJ Governor Ueda Kazuo (植田和男) at one point said that "the phase of policy has changed." The euro also rose sharply against the yen, reaching $1.1485–$1.1486 against the dollar and ¥180.91–¥180.92 per euro.
The below-market consensus reading for August's national CPI was also cited as a factor behind yen selling.