Yen slumps after BOJ hikes rates as expected

The yen experienced a decline against its major trading partners in Asian markets on Friday, following a rate hike from the Bank of Japan that did little to halt the currency's downward trend. The Japanese yen weakened by 0.6% to 156.91 yen per dollar, continuing its slide after a brief respite on Thursday, despite the Bank of Japan raising interest rates to their highest level in over three decades.

The decision to increase rates was not unanimous, as two board members voted to maintain the current policy. The yen also weakened against the euro by 0.7% to 180.21 yen. The decline in the yen's value came after data released on Friday indicated that Japan's core inflation remained stable near the central bank's 2% target in August, signaling increasing price pressures.

The market's focus now shifts to Governor Kazuo Ueda's press conference, where he will explain the central bank's decision. Traders will be seeking confirmation that further normalization of monetary policy remains a priority, as well as assessing whether the Bank sees any urgency to take further action.