Bank of Japan tomorrow, expected to raise policy interest rate by 1%, what will happen? USD/JPY?
Tomorrow's Bank of Japan meeting, expected policy rate hike to 1%. What will happen? USD/JPY?
First, what is about to happen?
Tomorrow, on June 16 at the BOJ meeting, the odds of a rate hike to 1.00% are quite high.
The current BOJ policy rate is 0.75%.
0.75% → 1.00%
a rate hike is anticipated
(In a Reuters poll, 94% of economists expect a hike)
If realized, it would be the first 1% rate since about 31 years ago in 1995
Is the market on alert?
What is really being watched is
“the unwinding of yen carry trades”
Until now, investors worldwide have been
“borrowing cheap yen to buy high-yield assets”
in such trades.
If the BOJ keeps raising rates,
Japanese yen funding costs rise
yen buying back
risk assets selling
are likely to occur, and thus,
US stocks
Nasdaq
BTC
gold
may be sold off in the short term
Past pattern: since 2024, after BOJ rate hikes (March, July, etc.), BTC has fallen by about 20–30% in several instances
■ From an FX trader’s perspective, what’s important?
Actually, it’s not the rate hike itself, but BOJ's statements afterwards
We should carefully confirm the June 16 BOJ announcement
■ Key points for USD/JPY
If it becomes 1%
If we just see a wait-and-see approach for a while
USD/JPY may see only limited declines (yen appreciation)
If hawkish comments indicate further rate hikes within the year
USD/JPY could fall sharply
More than the hike itself, the market is focused on whether further hikes will continue
in the future.
For USD/JPY traders, the statements and press conference after the June 16 BOJ meeting will be the main point of focus
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