Is Japan Raising Rates?… Following the Vice Governor, the Governor Also Hints at Rate Hike

According to Nikkei and Yomiuri Shimbun on the 16th, Ueda Kazuo, the Governor of the Bank of Japan, participated in a meeting of the National Association of Regional Banks the previous day and declared that "we will discuss and decide whether to raise interest rates" at the Monetary Policy Meeting to be held on the 23rd and 24th.

This aligns with the remarks made by Himino Ryozo, the Vice Governor of the Bank of Japan, on the 14th. Vice Governor Himino also stated in a lecture that "we intend to discuss and decide with the policy committee whether to raise interest rates."

According to Dotan Research, which provides short-term financial market information, the probability of the Bank of Japan raising rates next week, as seen by the financial market, rose from 60% on the 14th to 74% on the 15th.

The Bank of Japan ended its negative interest rate policy last March by raising the short-term policy rate, the benchmark interest rate, for the first time in 17 years, and after raising the rate from 0-0.1% to around 0.25% last July, it has been considering the timing of further hikes. The Bank of Japan has emphasized that it could raise rates further if inflation stabilizes above 2% and wages rise in tandem.

The virtual asset (cryptocurrency) market was also significantly affected. When the Bank of Japan raised rates last July, there was a massive unwinding of yen carry trades, leading to a sharp decline in most virtual assets. As the Bank of Japan raised rates, the value of the yen increased, and hedge funds and investors who borrowed funds in Japan to purchase other financial products unwound their positions.

At that time, Bitcoin (BTC) fell back to $60,000, and major altcoins such as Ethereum (ETH), Solana (SOL), and Binance Coin (BNB) also recorded declines.