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Now I'm even more confused. I thought that yen was the one with high interest rate, of the two. If yen is the one with the low ir, why does it matter that the b
by bdjsiqoocwk 2y ago
Now I'm even more confused. I thought that yen was the one with high interest rate, of the two. If yen is the one with the low ir, why does it matter that the boj cut ir?
- jdenning 2y agoYeah, I think you misunderstood the situation :) - Japan raised their rate from 0% to 0.25% and cut back their bond purchases in a move to strengthen the yen, at the same time the dollar got weaker. The Nikkei tumbled because many large companies in Japan - 1) had carry trade positions they had to unwind, and/or 2) export to the US (harder when dollar is weak vs yen and harder if the US enters recession).
- bdjsiqoocwk 2y agoUnderstood, thank you.