NEW YORK, July 31 Reuters The Japanese yen hit a fourmonth high against the dollar on Wednesday after the Bank of Japan raised rates to the highest since 2008 and indicated that more hikes may follow, while the dollar was broadly weaker before the Federal Reserves meeting statement.

The BOJ raised the overnight call rate target to 0.25 from 00.1, the largest increase since 2007.

A lot of market participants were preparing for this as if it was a possibility, but very few actually expected the BOJ to raise more than 10 basis points, said Helen Given, FX trader at Monex USA in Washington.

This upside surprise is giving yen a huge boost, especially because people think that the Fed might start telegraphing this afternoon for a cut in September, Given said.

Japan39;s rate increase came just months after the BOJ ended eight years of negative interest rates as the bank39;s chief seeks to dismantle his predecessor39;s unorthodox policies.

The Japanese central bank also announced plans to halve its monthly Japanese government bond JGB purchases to 3 trillion yen as of JanuaryMarch 2026.

The yen has rallied since hitting a 38year low of 161.96 against the greenback on July 3, in large part boosted by interventions by Japanese authorities. Traders unwinding short bets on the yen has added to the move.

Japanese authorities spent 5.53 trillion yen 36.8 billion intervening in the foreign exchange market this month to boost the currency, official data showed on Wednesday.

The…