πππWhy Bank of Japan (BoJ) rate hike was a non event? BoJ raised its policy rate to 0.75%, its highest since 1995. While the event was historically significant, the move was a non event for 3 reasons:
1. It was fully priced in. Investors had already baked the quarter point hike into their plans with overnight swap market showing a near 100% probability of the move before it happened.
2. Governor Ueda's lack of guidance into future rate hikes actually caused the yen to weaken further, dropping 1.3% to 157.53 yen per dollar.
3. Real interest rates in Japan remain negative (at around -2.2%). This means that BoJ is still supporting growth even as it "normalises".
So it turns out that BoJ 's historic interest rate hike was about as scary as a kitten dressed for Halloween. The market, which was expected to shudder at the move away from decades of negative rates, merely stifled a yawn & continued its rally.
@Tiger_comments @TigerStars @Tiger_SG @TigerClub @CaptainTiger
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Comments