Tokyo, Japan – In a bold move, the Bank of Japan raised interest rates for the first time in 17 years and abandoned its yield control curve policy. This decision marks a significant shift in the country’s monetary policy, as Japan had maintained negative rates since 2016.
The BOJ announced that it increased short-term rates to approximately 0% to 0.1% from the previous -0.1%. Additionally, the central bank eliminated its yield curve control policy for 10-year Japanese government bonds, which involved manipulating longer-term interest rates through bond transactions.
The Nikkei 225 index experienced a 0.7% drop amidst volatile trading, while the broader Topix index remained relatively stable. The Japanese yen also weakened against the dollar, trading at 149.60.
Meanwhile, Fidelity International revealed plans to reduce its China unit staff by 16%, resulting in the layoff of 20 employees. This restructuring comes amid challenges in China’s markets and a global downsizing effort by the firm. Additionally, leading solar products manufacturer China Longi announced a 5% reduction in its workforce to enhance organizational efficiency amidst market changes.
In a separate development, Nvidia CEO Jensen Huang introduced the company’s latest AI chips and software, named Blackwell, at an inaugural conference. This announcement is part of Nvidia’s strategy to strengthen its presence in the competitive AI market.
On the stock market front, futures showed minimal changes following a day where the S&P 500 and technology stocks rebounded. Futures linked to the broad market index saw a slight decrease, while Nasdaq 100 futures slipped slightly. Dow Jones Industrial Average futures, on the other hand, saw a modest increase of 16 points.
These developments across various sectors indicate a dynamic and evolving economic landscape in Japan and beyond, with implications for investors and businesses alike.