The Bank of Japan today raised its policy rate by 25bp to 1.25% with a 7-2 vote, reaching the highest level in 31 years—exactly as Aijian had expected. Meanwhile, the yen also did not rise after the rate hike in the usual way; instead, it once fell to around 156.7. The reason is something I broke down previously as well. This time, the rate hike itself was already fully priced in by the market, and the BOJ did not provide a sufficiently hawkish forward path.
I think the only aspect worth watching from this BOJ meeting is that the rate hike was ultimately approved 7-2. Two委员 voted against the hike, which suggests that the BOJ’s internal view on how quickly to continue tightening is not unanimously aligned.
Finally, a reminder again: in FX trading, it’s never about whether there is a rate hike or not—it’s about the difference between the actual outcome and what the market expected. The expectation gap is what FX truly trades #日本央行加息至31年高位
I think the only aspect worth watching from this BOJ meeting is that the rate hike was ultimately approved 7-2. Two委员 voted against the hike, which suggests that the BOJ’s internal view on how quickly to continue tightening is not unanimously aligned.
Finally, a reminder again: in FX trading, it’s never about whether there is a rate hike or not—it’s about the difference between the actual outcome and what the market expected. The expectation gap is what FX truly trades #日本央行加息至31年高位