The yen fell to the ¥157 range against the dollar in Japan's markets on the 18th, while the BOJ decided to raise its policy rate by 0.25 percentage points, to around 0.25%. The Nikkei 225 extended its gains after the announcement, while bond yields briefly settled down.
According to a Bloomberg report, the yen fell as low as ¥157.14, with the ¥157 range marking its first appearance in 3 days and roughly 2 weeks. Before the BOJ's announcement, it had been trading in the low ¥156 range. The Nikkei 225 rose more than 1,200 points at one point, climbing into the 65,000 range. Yields on newly issued 20-year and 30-year bonds, which had fallen in the morning, returned to the previous day's levels.
At the Bank of Japan's Monetary Policy Meeting, the decision was made to raise the target for the uncollateralized overnight call rate by 0.25 percentage points. Of the 9 policy board members, 2 deliberating members, Asada Toichiro (浅田統一郎) and Sato Ayano (佐藤綾野), opposed the rate hike.
Market participants said the yen's decline had accelerated against the backdrop of the increase in the number of dissenting members, while others said the statement conveyed concern about upside risks to prices, suggesting that further yen weakness would be limited. The focus regarding the BOJ's pace of future rate hikes is expected to be remarks at the press conference in the afternoon.
After the BOJ's announcement, some market participants said Japanese stocks were benefiting from yen weakness as well as the BOJ's clear indication of its intention to contain inflation. The focus is on how Governor Kazuo Ueda (植田和男) will characterize the pace of future rate hikes at the press conference beginning at 3:30 p.m.