The Japanese yen fell to near 158 against the U.S. dollar on Friday despite the Bank of Japan raising its target interest rate by 0.25 percentage points to roughly 1.25%, taking borrowing costs to a 31-year high. The exchange rate touched 158 during the day and stood at 157 as of 1527 GMT, compared with 153 about a week earlier. BoJ Governor Kazuo Ueda indicated that additional increases could follow, citing the need to prevent underlying inflation from exceeding the central bank’s 2% target. However, the policy decision passed by a 7-2 vote, raising questions about support for further tightening and contributing to the yen’s 1.3% decline. The increase extends the Bank of Japan’s move away from years of ultra-loose monetary policy, which began when it ended its negative interest-rate policy in March 2024.