Yen sinks, sending Japan stocks surging as Bank of Japan hike draws two dissents
TOKYO — The yen dropped after the Bank of Japan raised interest rates in a well-telegraphed move, as dissent from two board members cast doubt on how aggressively it will tighten policy from here. Japanese stocks rallied, helped by the weaker currency, which boosts the value of overseas earnings when repatriated into yen. Japanese 2-year government bond yields, which are most sensitive to monetary policy expectations, sank 2.5 basis points to 1.835 percent as of 0442 GMT. "The rate hike itself was in line with market expectations, but the two dissenting votes came as a modest surprise," said Hirofumi Suzuki, chief FX strategist at SMBC in Tokyo. "The outcome has somewhat tempered expectations for further rate hikes and conveyed a dovish impression." The yen extended early declines to be down about 0.7 percent at 157.085 per dollar, near session lows at 157.145, its weakest level since September 3. Against that backdrop, the Nikkei surged 1.7 percent to 65,221.53, topping the psychological 65,000 mark for the first time in more than a week. The index had been up 0.8 percent at the midday
