Major Market Dump: Unpacking the Causes đš
What's Not to Blame:
- Unemployment rate â
- WWIII fears and Genesis selling â
The Real Culprit:
- Bank of Japan raising interest rates â
Key Insights:
1. Historic Move by BOJ:
The Bank of Japan has increased its interest rate for the first time in 17 years. The last time this happened was in 2007, just before the US recession.
2. Impact on Investors:
With near-zero interest rates, Japanese investors were borrowing yen to invest in international markets, including US equities and crypto. The recent hike means borrowing costs are no longer negligible.
3. Market Reaction:
Investors are now selling off their international assets to pay back their yen-denominated loans, leading to a market dump.
Looking Ahead:
Unless the BOJ or the Federal Reserve cuts interest rates soon, the market is likely to face continued pressure.
