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The story
At the Bank of Japan’s Monetary Policy Meeting on the 18th, the policy board pushed through a 0.25-point rate hike to 1.25%, overriding dissent from 2 of its 9 members. The yen, which had been trading around ¥156.10 before the announcement, paradoxically fell to the ¥157 range instead — its weakest level in roughly two weeks. Faced with this counterintuitive move of the yen weakening despite a rate hike, thread posters debated whether the “2 dissenting votes” were really a valid reason for selling, argued over the Japan-US interest rate gap and US monetary policy, and traded opinions on how social security costs and an aging population relate to monetary policy.
In Tokyo foreign exchange trading on the 18th, the yen briefly fell to the ¥157 range against the dollar. The Bank of Japan, at its Monetary Policy Meeting held through that day, decided to raise its policy rate by 0.25 points to 1.25%. However, with 2 votes cast against the hike, the yen was sold off as expectations for further rate hikes receded.
This is the first time the yen has touched the ¥157 range since the 3rd, roughly two weeks ago. Before the decision was announced, it had been trading around ¥156.10.
Of the 9 policy board members, board members Toichiro Asada and Ayano Sato…(continues in the paid edition, 281 characters remaining)
Source: nikkei.com / Original article here
What people said
The heavy fiscal burden of social security costs is the real issue —
if they cut taxes, rate hikes and a weak yen push up prices and squeeze working-age people;
if they don't cut taxes, working-age people's income gets extracted like under "gokou-gomin" (a feudal-era 50/50 tax split, used here to mean crushing taxation).
Elderly people who are healthy enough to keep working but instead live it up on social security, going on trips and so on,
are today's aristocrats, today's court nobles, today's feudal lords.
People like them are the reason social security doesn't reach the people who truly need it,
and they squeeze the working generation under that same 50/50 split.
If the working generation wants to raise its voice, it should aim it not at tax cuts or handouts, but at today's feudal lords.
It's already been hiked, you know?
You doing okay?
US CPI growth for July 2026 was 3.4%.
Japan's CPI growth for July 2026 was 1.9%.
Japan's price increases are just import prices rising because of inflation overseas feeding through — it's not that domestic prices in Japan are actually rising on their own.
Despite the weak yen, prices in Japan are rising less than overseas.
Japan's price increases are being caused by inflation abroad, and Japan has been holding down wages to keep overseas price pressure from pushing up selling prices as much — that's how it's coping with deflationary domestic demand.
What Japan needs isn't to raise interest rates and strengthen the yen; it's to fight the deflation hidden behind high import prices and raise real wages for the working generation.
The BOJ's monetary easing exists to prop up the consumption of the working generation, which has been weakened by an aging population and the policy failures of the DPJ-lineage governments (the Democratic Party for the People / Constitutional Democratic Party).
With deflation from an aging population still ongoing, and the export industries wrecked under DPJ rule still not recovered,
stopping easing and raising rates now will only shrink working-age consumption and tip things into recession.
What's needed right now is to beat back deflation caused by the aging population,
not to raise rates, cut working-age demand into a recession, and strengthen the yen along the way.
Careful — if you blame everything on the DPJ, you'll lose sight of the facts.
Though if you're a paid shill, I guess it's on purpose.
The fact that 2 people voted against this is insane.
That's a "Sanae Token" appointment for you. (slang implying a board seat filled with a loyalist picked to suit PM Takaichi's preferred policies)
Nikkei's a joke.
That's part of it too.
Those two are going to keep voting against every single time from here on out.
Once it's 4–5, they won't be able to hike anymore.
So either they hike again next month,
or they pull a surprise 0.5-point hike before year-end.
The Fed's also seen as likely to hike once more before year-end,
so even another 0.25 next time won't narrow the gap.
I thought a surprise 0.5 was basically off the table,
but now it actually looks possible.
If the US hikes further, Japan should just threaten to dump a ton of US Treasuries.
Sure, Japan can say that.
Just can't actually do it, being America's lapdog and all.
> If the US hikes further, Japan should just threaten to dump a ton of US Treasuries.
Then the US would just cut off oil and gas supplies, lol
If they hadn't hiked, it might've been read as reckless fiscal mismanagement and triggered something like a Truss-shock.
That would've been a Japan-originated financial crisis.
Unless social security costs get funded through taxes, the fundamentals point toward a weaker yen regardless.
Regardless of Japan's policy,
if the US cuts rates, the yen will strengthen.
The market will use anything as an excuse to trade on.
"That's ridiculous" — well, that's just reality for you.
Here comes a Venezuela-style "special military operation," lol
Big corporations might be thrilled, but
think about the life of an old geezer like me too.
Raise the consumption tax to 20% in stages.
Do they want prices to climb even higher?
Whether they hike or not, it all comes down to what America decides anyway, so it's meaningless.
The two who joined in June are reflationists.
Come next July, a hawk is set to leave and be replaced by another reflationist.
The weak yen isn't ending anytime soon.
I've got a huge stash of 1-yen and 10-yen coins saved up.
Their scrap-metal value already exceeds their face value.
Just hurry up and redenominate already.
(;゚Д゚) Aluminum and copper, huh —
watch out for foreign "tokuryu" gangs coming after your coins. (tokuryu: loosely-connected, anonymously recruited crime rings, a term common in recent Japanese crime reporting)
Japan doesn't have that kind of power.
Isn't it because of yen carry trades driven by the rate gap?
They say almost half of it is still out there.
Exactly this.
And on top of it all, the country's strength is declining.
Background and Key Points of This Discussion
A rate hike is normally seen as a yen-strengthening factor, but this time the 2 dissenting votes fueled the view that “further hikes ahead will be limited,” and the yen instead weakened from around ¥156.10 beforehand to the ¥157 range. Looking only at the price action right after the announcement makes this hard to follow, but markets tend to price in the expected pace of future rate hikes more than the absolute rate level itself. Thread posts frequently centered on the Japan-US interest rate gap and the Fed’s moves, and there was also speculation about which board members cast the dissenting votes — but that speculation reflects posters’ own views within the thread and is not confirmed information. Some posts pointed to social security costs and an aging population as the cause of the rate hike and weak yen, but it should be noted separately that this is not a reason the Bank of Japan has officially given.
*This article is excerpted and summarized from the 5channel (News Speed+) thread “[Forex] Yen falls, briefly touching the ¥157 range — sold off despite BOJ rate hike decision, on “2 dissenting votes”.”
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