Dollar Hits 156.72 Yen After BOJ Dissent

The US dollar rose 0.5 percent to 156.725 yen on Friday. This gain followed a split decision by the Bank of Japan. Two policymakers dissented from the move to raise interest rates to 1.25 percent. This is the highest level in 31 years. Traders viewed the lack of a unanimous vote as a signal of limited hawkish intent. The currency had briefly climbed 1.3 percent to a two-week high of 158.05 yen.

According to GN markets/fx (en-US), the decision came despite expectations for a clear tightening path. The lack of explicit guidance for further hikes weakened the yen. Strategists noted that the Fed’s recent hawkish stance supports the dollar. The greenback is on track for its largest weekly rally since October 2025. Market participants remain cautious about potential intervention by Japanese authorities.

BOJ dissent complicates rate outlook

The Bank of Japan raised rates to 1.25 percent. However, the move failed to boost the yen. Traders cited the absence of strong forward guidance. Steven Englander of Standard Chartered stated that the lack of hiking punch favors the dollar. Ray Attrill of National Australia Bank noted that the failed unanimous vote raised eyebrows. This outcome undermines the expectation of multiple future hikes.

Japanese authorities conducted rate checks in the currency market. This is considered a preliminary step before intervention. Finance Minister Satsuki Katayama stated that Tokyo would not hesitate to act. A joint US-Japan move to boost the yen occurred in late July. Kevin Ford of Convera said a rate hike that weakens the currency is uncomfortable for policymakers. This gives the Ministry of Finance a stronger case to push back against one-sided price action.

Fed policy supports dollar strength

The dollar index rose 1.2 percent for the week. It reached a seven-week high. This followed the US Federal Reserve’s rate hike on Wednesday. The Fed signaled that more increases could be coming. Traders see a 55 percent chance of a quarter-point hike next month. This probability was 27 percent a week ago, according to CME Group data.

The euro rose 0.5 percent to US$1.1481. It was set to end the week 1 percent lower. The British pound gained 0.3 percent to US$1.3391. Retail sales data in the UK beat expectations. The Bank of England held rates but suggested potential increases. Bitcoin rose 5.9 percent to US$81,000. This marked its third straight day of gains following a sell-off on September 15.

Global markets track energy and policy

Forex participants remain focused on energy prices. Oil prices slipped to their lowest levels in about a week. Signs of easing supply pressures in Saudi Arabia contributed to this drop. China asked Tehran to help rein in the Houthis. This followed military actions against Saudi Arabia over the past week. These geopolitical factors continue to influence market sentiment.