Bank of Japan Interest Rate Increase Impact

  • 2 months ago
The Bank of Japan's surprise interest rate increase has shaken up the market! Traders who were borrowing yen at no interest to buy stocks are now facing a major dilemma. Find out what happened next!

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Transcript
00:00All right, so last week the Bank of Japan increased interest rates from 0% to 0.25%.
00:07This early increase surprised the market. So before this anyone could borrow the yen
00:11at no interest, change them to US dollars and buy stocks. Basically it was free money.
00:17Because the Bank of Japan increased interest rates, the US dollar crashed versus the yen.
00:23That meant the traders borrowing billions in yen to buy dollars could not cover their debt anymore.
00:28What could they do when they had to sell the stocks they bought earlier with
00:32those dollars? But wait! But wait, there's more!

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