Chair Warsh managed to convince markets of the central bank’s price stability commitment

USD/JPY surges to 157.1 this morning. The pair has now recouped about half of the impressive JPY gains earlier this month. The Bank of Japan as expected lifted the policy rate by 25 bps to 1.25%, the highest since 1997. The decision was a 7-2 split vote and that came as a dovish surprise.