Bank of Japan Interest Rate Increase Impact
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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See and share more shorts at https://fdrurl.com/tiktok
Watch the entire show at https://fdrpodcasts.com/5588/the-economy-crash-or-correction
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LearningTranscript
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!