Former member of the Bank of Japan says it is unlikely to raise interest rates again this year

According to Cointelegraph, Makoto Sakurai, former member of the Bank of Japan, stated that due to the economic turbulence caused by the sudden interest rate hike last time, the Bank of Japan will not raise interest rates again this year. Makoto Sakurai stated in a report on August 12th, "At least for the remainder of this year, they will not be able to raise interest rates again In early August, after the Bank of Japan suddenly raised its benchmark interest rate to 0.25%, there was a significant sell-off in the stock and cryptocurrency markets. This interest rate hike has disrupted yen arbitrage trading - investors borrow yen at low interest rates and use these funds to purchase foreign assets. It is worth noting that the catalyst is not the interest rate hike itself, but the subsequent event: the surge of the Japanese yen in the foreign exchange market. Starting from July 31st, the US dollar/Japanese yen exchange rate has dropped from around 153 yen to 145 yen. Overnight, the cost of loans denominated in Japanese yen sharply increased. Although this interest rate hike may disrupt global markets, Sakurai stated that it is a necessary change for Japan. Over the past 17 years, Japan's interest rates have remained between 0 and -0.1%. Sakurai said, "In the process of restoring normal monetary policy, they have decided to shift from almost zero interest rates to the normal 0.25%, which is a good thing." He added that it is wise for the central bank to "wait and see" how further interest rate hikes will proceed.