psftp says "The server's host key is not cached in the registry"

That message is not an error.

Every SSH/SFTP client needs to verify a host key of a server.

Even PuTTY and WinSCP asked you for sure on your first connection to the server to verify a host key.

Though PuTTY and psftp share a host key cache. Are you sure you used PuTTY on the same machine with the same local Windows account?

Anyway, either:

Run psftp once without the -batch switch. Check the host key and confirm if you trust it. psftp will cache the host key and will work from now on.
Or add -hostkey switch with a fingerprint of trusted hostkey to your psftp command in PowerShell script.

See also How to pass value to psftp prompt (though the higher-scored answer by @vmitchell85 is wrong, see the answer by @GerriePretorius).

CodeHunter