The Bank of Japan (BOJ) raised its key interest rate on Wednesday 31st July 2024, increasing it to 0.25% from a previous range of 0.1%. This was an effort to curb the yen's decline against the U.S. dollar and something we have at investorAi been watching for some time (see graph below).
The rate hike was widely anticipated, leading to a significant appreciation of the yen, which traded below 152 yen against the dollar both before and after the announcement. The yen's recent drop to levels around 160 yen per dollar had raised concerns, particularly for an economy that heavily relies on imports for oil and other essential goods like food.
This decision to adjust the overnight call rate comes just four months after the BOJ raised its key rate above zero for the first time in 17 years.
BOJ Governor Kazuo Ueda explained that the rate hike was based on the relatively solid foundation of the Japanese economy, which has seen gradual price increases supported by risin ...
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