BOJ raises rates by 0.25% to 1.25%, dollar surges past 157 yen

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The Bank of Japan, or BOJ, decided to raise its policy interest rate by 0.25% from 1.00% to 1.25%, the highest level in 31 years, in a non-unanimous vote, with two of nine board members opposing the rate hike. After the meeting's outcome was known, the US dollar surged above 157 yen, rising by about 1 yen to the lower 157 yen range, a two-week high, from the lower 156 yen range before the meeting began at 1:00 p.m. Tokyo time. The dollar was moving at 157.05-06 yen, compared with 155.92-156.02 yen in the New York market and 155.68-70 yen in the Tokyo market at 5:00 p.m. yesterday. The opposition of the two board members sparked concerns about the future direction of the current rate-hike cycle and disappointed some market players who had expected a larger rate increase. The BOJ's rate hike came after central banks around the world began shifting toward tighter monetary policy, with the Fed deciding to raise rates by 0.25% to 3.75-4.00% at its meeting on Wednesday, September 16, its first hike in three years, and signaling further increases this year. The European Central Bank, or ECB, decided to raise its policy rate by 0.25% at its meeting on September 10, its second hike this year, amid concerns about inflation. It marked the first time that the BOJ, the Fed, and the ECB decided to raise rates in the same month.

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％ECB rates
ECBRATES
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ECB's September rate hike is cited as part of the global tightening wave alongside the BOJ move, keeping the ECB policy rate higher.

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