Former BOJ Board Member: BOJ Likely To Hold Off on Rate Hikes This Year
Crypto News

Former BOJ Board Member: BOJ Likely To Hold Off on Rate Hikes This Year

1 хв
1 month ago

The Bank of Japan (BOJ) will refrain from raising its benchmark interest rate again this year, following the economic disruption caused by its recent unexpected hike.

Former BOJ Board Member: BOJ Likely To Hold Off on Rate Hikes This Year
The Bank of Japan (BOJ) will refrain from raising its benchmark interest rate again this year, following the economic disruption caused by its recent unexpected hike, according to former board member Makoto Sakurai.
Sakurai said that another rate increase is unlikely before March. The sudden hike in early August raised the rate to 0.25%, causing a sharp sell-off in equities and crypto markets. This move disrupted the Yen Carry Trade, where investors borrow yen at low rates to buy foreign assets. The resulting surge in the yen’s value saw the USD/JPY exchange rate drop from 153 to 145 yen per dollar, making yen-denominated loans significantly more expensive.
The crypto total market cap plunged by over $500 billion between August 2 and August 5, and fell below $2 trillion. Despite the market upheaval, Sakurai argued that the rate increase was necessary for Japan, which had maintained rates between 0 and -0.1% for 17 years. He advocated for a cautious approach, suggesting it’s wise for the BOJ to "wait and see" before considering further hikes.

BOJ Deputy Governor Shinichi Uchida confirmed on August 6 that the bank would avoid further rate hikes during periods of financial instability, emphasizing the need for continued monetary easing. The BOJ’s decision has drawn criticism from Japan’s primary opposition party. As domestic markets reopened post-holiday, a parliamentary committee planned to decide on summoning Governor Kazuo Ueda and Finance Minister Shunichi Suzuki for questioning.

This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators. This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice. The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap.
0 people liked this article