The Japanese Yen (JPY) extended declines against the US dollar, falling as much as 0.7% to 157.09 per greenback, after the Bank of Japan (BOJ) raised its key interest rate by a quarter point to 1.25%. While the rate hike was expected by economists surveyed by Bloomberg, the decision was not unanimous, with a 7-2 vote. Board members Toichiro Asada and Ayano Sato dissented, casting doubts on the outlook for further policy tightening and contributing to the yen's drop.
In other news, the United States is reportedly considering delaying the announcement of new tariffs on China until after next week's summit between Chinese President Xi Jinping and US President Donald Trump. This delay could serve to preserve the threat of tariffs as leverage in the upcoming negotiations. The administration had previously intended to release a trade report recommending a 7.5% tariff on Chinese goods before the meeting. The reason for the delay is unclear, but President Trump has frequently used tariff threats to pressure trading partners for concessions.
Separately, the European Central Bank (ECB) is expected to wait until December before implementing another rate increase to combat inflation, according to economists. Meanwhile, a Wall Street stock rally carried into Asian markets, buoyed by falling oil prices.
