BoJ raises rates to 1.25% but the yen still weakens
🏦 The Bank of Japan raised its policy rate by 25 basis points to 1.25%, the highest level in 31 years. The decision passed by a 7-2 vote, marking the second rate hike in just three months.
📈 The BoJ said underlying inflation is moving closer to its 2% target, while wholesale price pressures remain elevated and are increasingly feeding into consumer prices. The central bank also kept the door open to further hikes if the economic and inflation outlook evolves as expected.
💴 Despite the hike, the yen weakened toward 157 per dollar. Two dissenting votes and the lack of clear guidance on the timing of the next move prevented markets from interpreting the decision as strongly hawkish.
🔎 Interest-rate differentials between Japan and other major economies remain wide, meaning a 25 bp hike alone is unlikely to fully unwind the appeal of yen-funded carry trades.
#BoJ $BEAMX
🏦 The Bank of Japan raised its policy rate by 25 basis points to 1.25%, the highest level in 31 years. The decision passed by a 7-2 vote, marking the second rate hike in just three months.
📈 The BoJ said underlying inflation is moving closer to its 2% target, while wholesale price pressures remain elevated and are increasingly feeding into consumer prices. The central bank also kept the door open to further hikes if the economic and inflation outlook evolves as expected.
💴 Despite the hike, the yen weakened toward 157 per dollar. Two dissenting votes and the lack of clear guidance on the timing of the next move prevented markets from interpreting the decision as strongly hawkish.
🔎 Interest-rate differentials between Japan and other major economies remain wide, meaning a 25 bp hike alone is unlikely to fully unwind the appeal of yen-funded carry trades.
#BoJ $BEAMX
