There are less than 14 hours left until the Japanese yen interest rate hike

In addition to confirming the announcement of the interest rate change on December 19, the market is more concerned about whether the Bank of Japan will continue to raise interest rates. Currently, the interest rate is 0.5%, and after the hike, it will only reach 0.75%.

However, as previously mentioned, to bring the interest rate back to a neutral range, the market speculates that this round of interest rate hikes should eventually reach 1.25%, which means betting on 3 consecutive rate hikes.

The last time Japan raised interest rates consecutively was from March 2024, continuing until January 2025, taking about 10 months to raise Japan from a negative interest rate of -0.1% to a final rate of 0.5%.

Currently, Japan is still facing soaring prices, with the inflation rate exceeding 2% for 3 consecutive years. The public continues to criticize the Bank of Japan for not keeping up with inflation, resulting in very low actual borrowing costs.

The market is currently digesting the panic of consecutive rate hikes after the initial hike, and December is also the worst time for liquidity due to North American Christmas and year-end holidays, leading to significant market fluctuations.