Bank of Japan raises its key interest rate, aiming to curb yen's slide against the dollar

Well, with that sized increase, at least they have left themselves plenty of wriggle room for further hikes.

The action you take when you don't want to take action....

The action you take when you don't want to take action....

Yeah, BOJ really preferred not to do anything and sit on its hands as usual until Motegi strong jawed them into action by his public statement last week. LDP is freaked out by those dismal approval ratings.

usd now over 153jpy again.

soon to be 160 as some days ago.

@burgers and beersToday  02:23 pm JST

The action you take when you don't want to take action....

Yeah, BOJ really preferred not to do anything and sit on its hands as usual until Motegi strong jawed them into action by his public statement last week. LDP is freaked out by those dismal approval ratings.

Indeed. Central banks are supposed to be independent. But in Japan Abe said the BOJ was « a subsidiary of the government »!

Again, who writes this stuff?

That strategy has proven controversial. It did help to end a prolonged bout of deflation, or falling prices.

NO, the policy did nothing of the sort!

What happened to the narrative that the BOJ would never be able to raise rates or taper its bond purchases, as it was hopelessly addicted to the QE sugar high? Clearly that’s not the case.

I’ll still leave the lion’s share of my cash out of Japan earning 4.5% interest though

What happened to the narrative that the BOJ would never be able to raise rates

0.25%…

or taper its bond purchases

These “tapered” bond purchases are still going to be going at 3 trillion yen a month by early 2026.

Or 36 trillion yen per year.

It’s gonna be too slow to prop up the yen I am thinking, and they haven’t actually “done” it yet. They have just announced their hopes.

So, come back and sing in 2028, and when hopefully our remaining yen haven’t plunged below 200 to the dollar. My fingers are crossed.

Better late than never, even if it is snail paced.

I’ll still leave the lion’s share of my cash out of Japan earning 4.5% interest though

Don't blame you. Doing the same.

Raise it more !!!

Its just shot past 152, what was referred to as a resistance level, and is now 150.7 as London opens.

It seems like nobody knows how big the carry trade is, people borrowing in yen and buying US bonds or the Nasdaq, but it has acted like a massive false outflow from the Japanese economy. As the yen appreciates, money will have to flow back to Japan to repay the loans. This will happen double quick if AI stocks start stalling, which is likely given how unlucrative most AI is in practice (where is my self driving car?). The presence of the carry trade means that you cannot claim the yen is some barometer indicating the current state of the Japanese economy. Beware anyone claiming the country is "in the toilet" or other such nonsense.

Is not even 1%...

Good luck having corporations storing money in Japan's banks with this ridiculous rate..

“But in Japan Abe said the BOJ was « a subsidiary of the government »!”

The Japanese government owns 55 % of the BOJ. So the bank is technically a subsidiary of the J gov.

Learn more about the ownership and the Capital of the Bank here.

https://www.boj.or.jp/en/about/outline/index.htm

How will Japanese government pay back interest on its 250% GDP debt if the interest rate is rising?

The US treasury is paying more for interest than on defense right now due to rising rates.

How will Japanese government pay back interest on its 250% GDP debt if the interest rate is rising?

Most of the coupon payments go to the central bank, a public sector institution, which remits it back to the MoF. The other biggest holders are social security funds, many of them govt as well. The others are paid by printing yen.

Those bond holders get regular yen payments, which they can spend or invest in the Japanese economy.

0.25% ? What a joke, also this new higher rate. You get even double or more of that when you just only buy something. 1 bonus point per 200 yen or sometimes better, that's at least 0.5% you get with every simple shopping or restaurant transaction.

And as I have predicted the yen has rose to 148yen to the US dollar mark.

You are supposed to predict it before it happens no?

Did you predict it would be 150.60 by this evening too?