Ueda shock！ The ineffective policy change of “interest rate hike” that caused the Nikkei average to plummet， and the “laughable end” of a country with low financial literacy．
The Nikkei Stock Average has risen strongly, surpassing its bubble-era peak of 38,915 yen and reaching 42,224 yen (highest closing price) on July 11th, buoyed by optimistic phrases such as “highest price in 34 years” and “risk of not holding.” Perhaps due to the scorching heat every day, people were suffering from summer fatigue, and their prices suddenly plummeted in August. On August 2nd, the Nikkei recorded a drop of 2,216 yen, the second largest drop since 3,836 yen on October 20th, 1997, immediately after Black Monday. Then, on the 5th, the start of the week, it fell by 4,451 yen, far exceeding the drop immediately after Black Monday, setting a new record low for the first time in 37 years, and wiping out all of the gains it had made since the start of the year (the Nikkei average was 33,464 yen as of the end of last year). The “incomprehensible interest rate hike” announced at the Bank of Japan’s monetary policy meeting on July 31st is being blamed by market participants as the culprit behind this sudden drop. At this monetary policy meeting, Bank of Japan Governor Ueda decided to raise interest rates by 0.25% and reduce the planned monthly amount of government bond purchases by about 400 billion yen each quarter, to about 3 trillion yen in the January-March period of 2026. At a press conference, Bank of Japan Governor Ueda apologized for the delayed monetary policy, saying, “I regret that prolonged high inflation is placing a burden on the people,” but added of the latest policy change, “Even though interest rates have risen to 0.25%, this is still an extremely low level, and the real interest rate is deeply negative. He expressed a seemingly contradictory view that the impact would be extremely small, saying, “I don’t think there will be a strong brake on the economy,” and “The decrease in the (Bank of Japan’s holdings) balance will be around 7 to 8% even over the next two years, and I don’t think the upward pressure on interest rates that will result from this will be significant.” What can be said from Governor Ueda’s remarks is that the latest policy change is a “0x0 policy mix” of interest rate hikes that do not put a brake on the economy and reduced government bond purchases that do not affect market interest rates, and is an “ineffective policy change” that gives no indication at all of the Bank of Japan’s intentions as to what route it will take to “curb prolonged inflation.” In other words, this suggests that the purpose of the interest rate hike was not to “eliminate prolonged inflation,” but rather that Ueda’s aim as the Bank of Japan was to implement “ineffective policy changes.” So why did Bank of Japan Governor Ueda move to make this “ineffective policy change’’ this time? The following three points are considered as reasons for this. Source below.
>>1 The fact that we have unprecedented negative interest rates in other countries, an ultra-weak yen, and bubble-like stock prices is what’s abnormal. This has only been corrected, and even now, ultra-low interest rates, an ultra-weak yen, and stock prices remain in a bubble state, so further tightening is necessary.
>>1 What’s the problem? We can’t continue with ultra-low interest rates, an ultra-weak yen, and a stock bubble that relies on the weak yen. It’s good that they were able to solve the problem in one fell swoop.
Once the presidential election is over, the American market will plummet, and hard times will come for NISA investors. I’ve pooled my money in preparation for that. Hurry up for the bargain sale lol.
To me it just looks like an article written by someone who doesn’t want to lose money on their investment and is bashing Ueda out of personal grudge lol.
Interest rates were raised, the yen was kept at a low level of 140 yen, and the yen did not appreciate. If we look only at the monetary policy aspect, it was a success.
>>19 The yen would have naturally strengthened without that interest rate hike. I have the impression that they raised interest rates in a completely pointless, stupid, and stupid way. Ueda’s claims that the economy is improving are all lies. He said nonsensical things like mortgages will be deferred, and I was surprised that someone with so little knowledge is the head of the Bank of Japan. I think the Nikkei was sold off because he’s an idiot.
>>22 They replaced overseas players with domestic players This will improve stability but it’s individuals who are the losers I feel bad for beginners in particular.
Are they trying to make interest rate hikes seem like a bad thing? There will be casualties, but that’s unavoidable. Protecting zombie companies will only prolong the lost 30 years.
Ueda-san is a capable man. He raised interest rates and corrected the weak yen. He ended the Japanese stock bubble and returned it to normal. Well, the Nikkei is still too high, though.
What should we do about yen carry trades in an environment of low interest rates? Japan has printed a ton of government bonds, but now they can’t raise interest rates, so foreigners are borrowing in yen and investing it overseas. Aren’t foreigners making more money than Japan and Japanese companies?
Not just USDJPY, but EURJPY, GBPJPY, or CNYJPY as well. If you look at the big picture, the strong yen has just been corrected. I wonder why Japanese people can’t think for themselves. They can just swallow those stupid economic articles.
No matter what happens to the stock pigs and NISA idiots, Ueda is just trying to get Japan back to normal, and he’s competent. The excessive depreciation of the yen has subsided.
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