The Bank of Japan just raised rates, yet the yen has weakened across the board! The market was a bit unexpected this time⚠️
On September 18, the Bank of Japan raised rates by 25 basis points as expected, but instead of seeing the “rate hike = yen rises” reaction everyone imagined, there was a clear move in the opposite direction. The dollar/yen surged more than 70 points in the short term, the euro/yen jumped over 80 points, and the pound/yen even rose more than 90 points.
In plain terms, **the market has never focused only on whether rates are raised—it’s whether, after the hike, the tightening can continue and how fast monetary policy will actually move in the future.** If the market had already priced in the expectation of a rate hike beforehand, then after the “shoe drops,” there may be profit-taking.
This is also something worth paying attention to for global markets. The yen is an important funding currency in global capital markets. If Japan continues to tighten policy, it could affect yen carry trades, global liquidity, and the flow of funds into US stocks, gold, and crypto assets in the future.
So don’t just focus on the Bank of Japan “raising 25 basis points.” What really matters is **whether the yen can stop falling next, and whether Japan’s monetary policy will continue to tighten.** Follow me and I’ll continue breaking down the global macro and crypto market money logic in plain language.$AVA $ONE $ARB
On September 18, the Bank of Japan raised rates by 25 basis points as expected, but instead of seeing the “rate hike = yen rises” reaction everyone imagined, there was a clear move in the opposite direction. The dollar/yen surged more than 70 points in the short term, the euro/yen jumped over 80 points, and the pound/yen even rose more than 90 points.
In plain terms, **the market has never focused only on whether rates are raised—it’s whether, after the hike, the tightening can continue and how fast monetary policy will actually move in the future.** If the market had already priced in the expectation of a rate hike beforehand, then after the “shoe drops,” there may be profit-taking.
This is also something worth paying attention to for global markets. The yen is an important funding currency in global capital markets. If Japan continues to tighten policy, it could affect yen carry trades, global liquidity, and the flow of funds into US stocks, gold, and crypto assets in the future.
So don’t just focus on the Bank of Japan “raising 25 basis points.” What really matters is **whether the yen can stop falling next, and whether Japan’s monetary policy will continue to tighten.** Follow me and I’ll continue breaking down the global macro and crypto market money logic in plain language.$AVA $ONE $ARB
