Bank of Japan hikes rates - Japanese stocks decline

Thur, 08/01/2024

by Ellie LeTu

Source: Financial Times

• Interest Rates Hike

  • The Bank of Japan surprisingly hiked interest rates from 0.1% to 0.25%

  • This is its highest level in 15 years, since the 2008 financial crisis.

• Interest Rates were Negative

  • The BoJ used negative interest rates for the past decade before ending this policy in March.

• Results in Japanese stocks Decline

  • A stronger Yen makes Japanese stocks more expensive for international buyers.

  • A stronger Yen also hurts Japanese companies who export, because money brought in from foreign currencies translate into fewer Yen.

    • 35% of the revenue in the Japanese stock market (TOPIX) comes from abroad.