Yen plunges to two-week low after BOJ’s split rate hike decision

The Bank of Japan raised interest rates on September 18, 2026, and the yen fell anyway. That apparent contradiction tells you everything about how currency markets work: it is not what a central bank does that moves prices, it is what traders think the bank will do next. The BOJ lifted its policy rate by 25 basis points to 1.25%, the highest level since April 1995. But two of the nine board members voted against the move, and that minority opinion was loud enough to send the yen sliding to a two-week low against the US dollar. What happened and why the vote count matters The policy decision came out of a two-day meeting, with board members Toichiro Asada and Ayano Sato dissenting on the grounds that the Japanese economy lacked sufficient strength to absorb another tightening move. A 7-2 vote sounds like a clear majority, and technically it is. The problem is that forex markets were pricing in something closer to unanimous conviction, the kind of institutional commitment that signals more hikes are coming in quick succession. Instead, they got a split decision and a governor, Kazuo Ueda, who emphasized a data-dependent approach with no predetermined pace for future increases. In cen...