The Bank of Japan has raised interest rates as scheduled, heightening concerns over the closure of "arbitrage trades."
Analysis suggests that the potential risks of the Bank of Japan's interest rate hike cycle still exist. Currently, the Forex Options market is pricing in a higher probability of a stronger yen. If the range of spot execution prices is expanded or the expiration time is extended, the tendency for the yen to strengthen will increase, and this tendency is more pronounced in the euro against the yen.
The Bank of Japan's hawkish rate hikes and upward revision of inflation forecasts caused the yen to rise sharply.
The Bank of Japan has raised interest rates by 25 basis points as scheduled.
The Bank of Japan raised interest rates as scheduled, and the market's focus shifts to the speech of Masayoshi Ueda.
On Friday, the Bank of Japan raised interest rates by 25 basis points as expected, increasing the policy benchmark rate to 0.5%.
The Bank of Japan is confident in the market, implementing the largest interest rate hike in eighteen years.
On Friday, the Bank of Japan raised interest rates, with a 25 basis points increase, the largest since February 2007, further indicating that the Japanese economy is finally showing signs of returning to normal. This move was widely anticipated in the market and reflects the increasing optimism of the Bank of Japan regarding continued wage growth, which would keep the inflation rate close to the 2% target. The committee decided to raise the short-term policy interest rate from 0.25% to 0.5% by an 8 to 1 vote. Committee member Toyoaki Nakamura opposed this decision. The Bank of Japan's policymaking committee has a median forecast of 1.0% growth for real GDP in fiscal year 2026, as of October.
Bank of Japan Resumes Hiking Rates as Economy Strengthens
Express News | BOJ Increases Short-Term Interest Rate Target to 0.5% (Est. 0.5%), Highest Level in 17 Years. Following the Decision, Nikkei 225 Up 0.6%, USDindex Down 0.2%.
