The yen fell toward 158 against the dollar, with expectations for a Bank of Japan rate hike in October dropping to less than 20%.

The summary of opinions from the Bank of Japan's September meeting disappointed investors, who had hoped for signs that policymakers might be preparing to act again this month; as a result, the yen weakened against the dollar, falling as much as 0.5% to 158.21, the worst performer among G-10 currencies. In the summary of opinions, the Bank of Japan confirmed that its policy focus has shifted to preventing inflation from overshooting its target. Other views put forward by policymakers included that the neutral rate may be higher than estimated; that many companies believe the impact of interest rate hikes so far has been limited; and that it would be appropriate to raise the policy rate further sooner rather than later. Swap market pricing for a Bank of Japan rate hike by October 30 fell from an intraday high of more than 30% on Wednesday to just under 20% on Thursday morning. The market has fully priced in the possibility of a rate hike at the December meeting.