The Bank of Japan is stirring things up! Next week's policy meeting is set to continue the 'series' of interest rate hikes
Everyone, the Bank of Japan has suddenly hinted at something big! Three sources have secretly submitted letters: at next week's policy meeting, they are going to openly commit to 'continuing the rate hikes'—but the pace will depend on whether the economy can withstand this wave of action.
Let's recap the background: Governor Kuroda has long buried the hints of 'rate hike in December,' and the market has already fully absorbed the expectation of 'interest rates soaring from 0.5% to 0.75%.' Now everyone's focus is firmly on the 'neutral interest rate.' Although the Bank of Japan may have updated its estimate for this number internally, they have directly stated that 'this number does not count' and will not use it as a script for rate hikes.
So what should we look at for the pace? Look at the actual chain reactions: Are banks lending freely? Is corporate financing difficult? Some insiders even say 'Japan's actual interest rate is absurdly low,' which means rate hikes can come in several waves without needing to rush to a final point.
What kind of market movements will this 'gradual rate hike with testing' operation create?
Let us know your predictions in the comments!
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