Awesome! Ueda Kazuo's Doveish Rate Hike Operation, Is the Bank of Japan Becoming a Replica of the Federal Reserve?
Ueda Kazuo has just finished his speech, which is completely different from the hawkish rate cut operations of the Federal Reserve. This time he is implementing a doveish rate hike. Once again, it makes people feel that the Bank of Japan is like a branch of the Federal Reserve.
The strategy Ueda uses is similar to Powell's, tightening monetary policy (raising interest rates) in actual operations while verbally releasing signals of easing to soothe market sentiment.
After his speech, the USD/JPY exchange rate briefly rose to 156.37. For the cryptocurrency market and other risk assets, the ideal scenario is for the yen to decline instead of appreciating.
If the yen continues to decline or remain weak, the cost of borrowing in yen will still be very low. Moreover, due to the depreciation of the yen, when repaying yen-denominated debts, the amount of yen that needs to be converted to other currencies will decrease. This way, carry traders can continue their operations.
Global capital giants and hedge funds will continue to borrow the depreciated yen, convert it to dollars, and then buy assets with high volatility and returns, with Bitcoin and tech stocks being their primary considerations.
In simple terms, the depreciation of the yen is good for the risk market. The USD/JPY exchange rate of 152 is an important dividing line; as long as the exchange rate does not fall below 152, the yen can still be considered weak. So, taking advantage of this opportunity, Ah Bo has already set up a big picture for a short-term position that can be flipped, just waiting for the right moment to reap the rewards. Brothers who want to join in, gather at 聊天室!
