Latest Bank of Japan Meeting: Hawkish Rate Hike + Dovish QT

The Bank of Japan meeting just raised interest rates to a 31-year high of 1%,

However, this meeting is not negative for the market, and even has a small positive effect. First, the market had already priced in this rate hike expectation in advance. Even if they hinted at further rate hikes in the future, it was within market expectations.

Moreover, they stated they would suspend reducing bond purchase scale starting from next April. And they retain the possibility of increasing government bond holdings at any time. This is the small positive I mentioned earlier.

Therefore, this meeting is a combination of a hawkish rate hike and dovish QT, which is neutral for the market. And we can confirm this from the current market reaction,

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