Asian currencies traded mixed on Friday, with the Japanese yen weakening despite a Bank of Japan interest rate hike, while a hawkish Federal Reserve outlook kept the U.S. dollar supported near a seven-week high.
The U.S. Dollar Index was largely unchanged at 100.23 as investors assessed the outlook for global interest rates following key policy decisions from the BOJ and Fed.
The yen came under pressure after the BOJ raised its policy rate by 25 basis points to 1.25%, the highest level in 31 years. USD/JPY climbed about 0.7% toward 157 following the 7-2 decision.
Although the rate increase was widely anticipated, two BOJ policymakers voted to leave rates unchanged. The dissent gave the decision a more dovish tone and reduced expectations that Japan's central bank could accelerate monetary tightening.
Investors were awaiting comments from BOJ Governor Kazuo Ueda for further signals about the timing and pace of future rate hikes.
Japan's inflation data also provided limited support for additional tightening. Core consumer prices, excluding fresh food, increased 1.7% year-on-year in August, slightly below economists' forecast of 1.8% and unchanged from July. Inflation excluding fresh food and fuel rose 1.9%.
Meanwhile, the U.S. dollar remained supported after the Federal Reserve raised its benchmark rate by 25 basis points on Wednesday to a range of 3.75%-4.00%. Updated Fed projections indicated another rate increase could come this year. Fed funds futures showed markets pricing a 53% probability of another quarter-point hike at the next meeting.
Elsewhere in Asian currency markets, the Australian dollar gained 0.3% against the greenback. USD/CNY slipped 0.2%, indicating a modest strengthening in the Chinese yuan, while USD/KRW advanced 0.4% as the South Korean won weakened.
The Singapore dollar and Indian rupee were largely unchanged. Higher U.S. Treasury yields and elevated energy prices also remained key factors shaping currency market sentiment as traders weighed the outlook for global monetary policy.


Trump Threatens EU Tariffs Over Canada Membership Proposal
Iran Economic Crisis Forces Afghan Families to Return Home
Trump Hopes Iran War Nears End as Yemen Fighting Escalates
Oil Prices Fall as Saudi Supply Concerns Ease
BOJ Set for 25-Basis-Point Rate Hike as Yen Weakness Fuels Inflation
Asian Stocks Rise After Fed Rate Hike
US Stock Futures Rally as Markets Digest Fed Rate Hike
South Korea Producer Prices Rise 0.2% in August
Asian Gold Stocks Rise as Bullion Rebounds on Softer Dollar
Yemen Fighting Threatens Red Sea Oil Routes
Asian Currencies Mixed as Dollar Holds Gains After Fed Rate Hike
Gold Prices Rise as Oil and Treasury Yields Fall
Asian Stocks Rise as Oil Falls, BOJ Rate Decision in Focus
UK Inflation Rises to 3.1% Ahead of BoE Rate Decision
Venezuela Nears Deal to Move $4 Billion in Gold to New York Fed
Vietnam, U.S. Firms Plan 29 Deals Across Energy, Tech and Aviation 



