Yen Drops Even After BOJ Lifts Policy Rate as Yield Gaps Remain.

The Bank of Japan (BOJ) raised interest rates, but the yen still dropped due to the wide yield differential between Japan and other major economies. Traders had anticipated the rate hike but are now unsure if further tightening will be enough to discourage yen-funded carry trades. The currency weakened slightly against the dollar, while Japanese government bond yields rose. The BOJ's decision to raise rates and reduce bond buying reflects its commitment to normalizing policy. [Extracted from the article]