Yen extends losses as traders doubt BOJ’s rate-hike pace

The Japanese yen dropped to around 157.70 per US dollar on September 22, falling 0.22% on the day and marking its third consecutive session of losses. The culprit: a growing sense among currency traders that the Bank of Japan simply can’t hike rates fast enough to close the gap with the rest of the world. Just four days earlier, the BOJ raised its policy rate by 25 basis points to 1.25%, the highest level Japan has seen in 31 years. On paper, that sounds aggressive. In practice, the market shrugged. A rate hike that felt like a whisper The September 18 decision came via a 7-2 vote, with two board members dissenting in favor of keeping policy looser. That split sent a clear signal to traders: even inside the BOJ’s own ranks, there’s no consensus that aggressive tightening is the right call. Governor Kazuo Ueda framed the move as the start of a “new phase” focused on preventing inflation from overshooting. He left the door open for back-to-back hikes if conditions warranted it. The yen had rallied to a seven-month high earlier in September on expectations the BOJ would act. Once the hike landed, traders decided the pace wasn’t ambitious enough and started selling again. Markets are c...