Yen Falls Following BoJ Rate Decision

(RTTNews) - The Japanese yen weakened against other major currencies in the Asian session on Friday, following the Bank of Japan (BoJ) interest rate decision.

The Bank of Japan lifted its benchmark rate by a quarter point to a 31-year high, as widely expected.

The policy board, governed by Ueda Kazu, decided by a 7-2 majority vote to raise the interest rate to 1.25 percent from 1.00 percent.

The current rate is the highest since 1995. The bank had lifted its benchmark rate by 25 basis points in June.

Board members Asada Toichiro and Sato Ayano dissented from the hike.

The board said it will continue to raise the policy rate and adjust the degree of monetary accommodation, in response to developments in economic activity and prices as well as financial conditions.

Inflation is expected to accelerate to a level clearly above 2 percent from the second half of fiscal 2026.

Asian markets traded higher, as a pullback in crude oil prices and bond yields helped ease global inflation worries and the outlook for interest rates. Market sentiment improved after US President Donald Trump stated that Washington is "hopefully toward the end" of fighting with Iran and that he has spoken "directly" with Iranian officials.

Supply-related concerns eased amid Saudi Arabia's efforts to get its vital East-West pipeline back in operation and after it offered loadings of crude oil to Asian refiners via ship-to-ship (STS) transfer off Oman's Sohar port.

In the Asian trading today, the yen fell to more than a 2-week low of 157.27 against the U.S. dollar, from yesterday's closing value of 156.15. The yen may test support near the 161.00 region.

Against the euro, the pound and the Swiss franc, the yen fell to near 2-week lows of 180.65, 210.23 and 191.02 from Thursday's closing quotes of 172.22, 208.56 and 189.35, respectively. If the yen extends its downtrend, it is likely to find support around 185.00 against the euro, 214.00 against the pound and 196.00 against the franc.

Against the Australia and the Canadian dollars, the yen slid to near 2-week low of 112.10 and 112.48 from yesterday's closing quotes of 111.10 and 111.63, respectively. On the downside, 115.00 against the aussie and 115.00 against the loonie are seen as the next support levels for the yen.

The yen dropped to a 9-day low of 90.15 against the NZ dollar, from yesterday's closing value of 89.44. The next possible downside target for the yen is seen around the 95.00 region.

Looking ahead, Eurozone current account data for July, European Central Bank's consumer inflation expectations for August and Eurozone construction output for July are slated for release in the European session.

In the New York session, U.S. industrial and manufacturing productions for August, U.S. Consumer Board's leading index for August and U.S. Baker Hughes weekly oil rig count data are set to be released.