Analysis: Market focus shifts to Bank of Japan Governor Kazuo Ueda's press conference.

According to an analysis by the financial website Investinglive, the Bank of Japan raised interest rates by 25 basis points to 0.75%, in line with market expectations. This marks the highest level of Japanese interest rates in 30 years and highlights the Bank of Japan's gradual shift away from ultra-loose policies. Given the continued strength of inflation data and increasingly confident signals from policymakers, the market had already fully priced in the rate hike decision.

From a market perspective, this policy adjustment lacked surprise, reducing the volatility risk associated with previous policy changes. Unlike previous instances that triggered large-scale unwinding of yen carry trades, the yen's reaction this time is likely more influenced by policy guidance than by the interest rate hike itself. Market focus quickly shifted from the rate hike itself to the central bank's forward guidance and Governor Kazuo Ueda's assessment of future policy direction. Ueda is likely to adopt a cautious tone at the press conference, emphasizing that future adjustments will depend on whether inflation is sustainable and demand-driven. He is expected to highlight the importance of wage growth, household consumption, and corporate investment, while also pointing to the recent rise in Japanese government bond yields and the necessity of avoiding financial turmoil. (Jinshi)