The yen weakened 0.5% to 158.21 per dollar on Oct. 1, making it the worst-performing Group-of-10 currency, after markets viewed the Bank of Japan’s summary of opinions from its September monetary policy meeting as less hawkish than expected. The probability of an Oct. 30 rate increase implied by the swaps market fell below 20% after briefly exceeding 30% the previous day, while an additional hike by December was fully priced in. BOJ policymakers discussed the risk of inflation overshooting the central bank’s target, the possibility that the neutral interest rate is higher than previously estimated, and the limited impact of earlier increases on companies. Some members said another rate increase sooner rather than later would be appropriate, but strategists said the guidance did not sufficiently strengthen expectations for consecutive hikes. The Federal Reserve’s hawkish stance and the resulting gap between U.S. and Japanese monetary-policy outlooks have added pressure to the yen. Japan’s large-manufacturer sentiment improved to its highest level in more than eight years in the Oct. 1 Tankan survey, although evidence of stronger inflation pressure remained limited. Bloomberg Economics’ Taro Kimura said the survey reduced the likelihood of consecutive October hikes. Further dollar gains above 158 yen could also be constrained by concern about foreign-exchange intervention.