The Bank of Japan raised interest rates for the first time in eight years, leading to concerns about financial market impacts. However, the anticipated sell-off of US Treasuries by Japanese investors has not occurred. This is because Japanese investors still hold the largest share of Treasuries and the interest rate gap between the US and Japan remains significant, reducing the incentive for large-scale carry trade unwinding.
The Bank of Japan raised interest rates for the first time in 17 years, indicating a shift towards an inflationary economy. This move is expected to benefit Japanese equities and may influence the Federal Reserve's upcoming decision. While rate cuts are generally favorable for stock markets, investors may want to prioritize high-quality companies in response to persistent inflation concerns.
