Yen slips after BOJ raises rates in widely anticipated move

By Tom Westbrook

SINGAPORE, Dec 19 (Reuters) - The yen fell slightly on Friday after the Bank of Japan delivered a widely expected rate hike, leaving markets awaiting further details from its governor later in the day for clarity on whether the central bank can keep hiking rates next year.

The yen was down 0.25% at 155.94 per dollar after the BOJ raised its policy rate to 0.75% from 0.5% in a move that had been well ?telegraphed by policymakers, prompting traders to sell the currency on the fact.

The euro was up 0.2% at 182.78 yen, while sterling rose 0.2% to 208.51 yen, both largely unchanged from ?levels prior to the decision.

"There seems to be a conversation going on and the reaction we're seeing in the market, ?in my belief, is about future moves from the BOJ... (they're) not dead set on another hike," ?said Bart Wakabayashi, Tokyo branch ?manager at State Street.

"I do believe there's consensus that 1% or 1.25% is sort of the neutral rate at the moment, it just seems like it's going to ?be a bit of a steeper hill for the BOJ to get ?there."

The BOJ again noted real rates were at "significantly" low levels even after the hike, and pledged to continue tightening should the economy and inflation pan out as forecast.?

Much of the yen's trajectory now hinges on BOJ ?Governor Kazuo Ueda's press conference at 0630 GMT to lay ?out the future ?interest rate path.

EURO DIPS AS LAGARDE REBUFFS HAWKS

Overnight, the dollar had briefly weakened following a sharp and unexpected fall in U.S. inflation, but investors were not sure how far to trust the data since collection was interrupted by ?the U.S. government shutdown, and the move soon retraced.

Sterling round-tripped to sit at $1.3374 after the Bank of England cut interest rates to 3.75%, as expected, but the decision was closer-run than the market had anticipated which may limit the room for further easing.

The euro was flat at $1.1719 in Asia, weighed down because European Central Bank chief Christine Lagarde offered no forward guidance and said all options were on the table, pushing back against more hawkish members.

"In recent weeks, hawkish commentary from ECB Executive Board Member Schnabel had driven ?a shift ?in the market's assessment of the risks to policy moving forward," ANZ analysts said in a note to clients. "But (the) balanced tone signals Schnabel's view that the next move is more likely to be a hike is not broadly ?shared across the council."

The ECB left its policy rate on hold at 2%, as expected.

On the political front, European Union leaders decided on Friday to borrow cash to fund Ukraine's defence against Russia for the next two years rather than use frozen Russian assets, sidestepping divisions over an unprecedented plan to finance Kyiv with Russian sovereign cash.

NORWAY, SWEDEN HOLD RATES

Norway's crown was little changed at 10.16 per dollar after the central bank left rates on hold at 4% and indicated it was in no hurry to cut. There was not much movement in the Swedish crown after rates ?were left on hold, as expected.

The Australian dollar eased 0.1% to $0.6607, while the New Zealand dollar fell 0.24% to $0.5761.

China's yuan was firm in onshore trade, hovering near a more than one-year high hit on Thursday, while South Korea's won has been under sustained selling pressure and was wobbly at 1,478 per dollar.

Cryptocurrencies bounced on ?Friday, with bitcoin up 1.3% at $86,718.92, while ether rose more than 3% to $2,914.43.

(Reporting by Tom Westbrook; Editing by Shri Navaratnam and Jamie Freed)