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⭕BOJ Hikes Rates… Without Actually Tightening ❓
The BOJ just raised rates by 0.25%, in line with expectations, but this is not the start of a real tightening cycle.
💠After 30+ years of cheap money and deflation, the BOJ knows hiking too fast would hurt businesses and domestic consumers, not markets.
👉This move is about balance, not tightening.
> Pressure is coming from both sides:
- Inflation has stayed above 2% for nearly 4 years
- The yen keeps weakening as carry trades remain active
- Keep rates too low → imported inflation.
- Hike too fast → self-inflicted economic damage.
🚩So the BOJ’s only option: slow, small hikes + very soft guidance.
> Even a 1% rate by 2026 would be high for Japan, yet still very low globally.
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