The Bank of Japan (BOJ) won’t hike its benchmark interest rate again this year following the economic turmoil caused by the last sudden hike, according to a former board member of Japan’s central bank. 

“They won’t be able to hike again, at least for the rest of the year,” former BOJ board member Makoto Sakurai told Bloomberg in an Aug. 12 report.

“It’s a toss up whether they can do one hike by next March.”

The equities and crypto markets saw a sharp sell-off in early August after the BOJ suddenly raised its benchmark rate, raising it to 0.25%.

The hike unsettled the Yen Carry Trade — where investors borrow in Yen at low interest rates and use the funds to purchase foreign-owned assets.

Notably, the catalyst wasn’t so rate hike itself but rather what followed: the surging value of the yen in foreign exchange markets. From July 31, the USD/JPY exchange rate dropped from around 153 yen per dollar to 145.

Overnight, yen-denominated loans became drastically more expensive.

Days later, the crypto total market cap fell over $500 billion in three days between Aug. 2 and Aug. 5.

While the rate hikes may have disturbed global markets, Sukari said the move was a well-needed change for Japan, which had been running rates of between 0 and -0.1% for the last 17 years.

“In the process of returning to normal monetary policy, it’s good that they decided to move from a world of almost zero interest rates to a normal 0.25%,” Sakurai said, adding that it would be wise for the central bank to “wait and see” how further hikes would play out.

Related: Bitcoin bull-bear market cycle signals potential bear market — Analyst

Meanwhile, the crypto markets were also battered by a mix of crowded leverage positions and outsized selling from traders such as Jump Trading, which dumped more than $370 million in ETH between July 24 and Aug. 4, causing them to tumble to the downside.

Following on from the turmoil, the Japanese central bank said it would not look to make any further raises, particularly during times of economic stress.

On Aug. 6, BoJ Deputy Governor Shinichi Uchida said the central bank would not raise interest rates when financial markets were unstable.

“As we’re seeing sharp volatility in domestic and overseas financial markets, it’s necessary to maintain current levels of monetary easing for the time being,” Uchida said.

The BOJ’s decision to hike rates has sparked criticism from Japan’s primary opposition party.

When the country’s domestic markets re-open following a public holiday on Aug. 12, a parliamentary committee will convene on Aug. 13 to decide when Governor Kazuo Ueda and Finance Minister Shunichi Suzuki will be called in for questioning.

Magazine: How Chinese traders and miners get around China’s crypto ban