BOJ Expected to Raise Rates by 25 Basis Points

The BOJ's expected 25 basis point rate hike could lead to a stronger yen and a slight decline in stock prices in the short term. The N225 is trading above its 20-period SMA and below its 50-period SMA, with an RSI of 53.5, indicating nearly neutral momentum. The MACD being well below its signal line suggests short-term downward pressure. However, market expectations and corporate earnings reports may mitigate these effects. Therefore, a slight decline is likely over the 1-3 day period, but no major move is expected.

The BOJ's expected 25 basis point rate hike is a hawkish signal for JPY and would normally create downward pressure on USDJPY. However, the market may have largely priced in this expectation; indeed, the change over the last 24 hours is only -0.02%. Technical indicators remain upward: the price is above SMA20 and SMA50, RSI is at 60, and MACD is slightly above the signal line. Therefore, there is a mixed picture in the short term; if the rate hike materializes, JPY could appreciate and USDJPY could turn downward, but current momentum points upward. Caution is warranted, and confidence is low due to directional uncertainty.

Expectations of a BOJ rate hike could lead to appreciation of the Japanese yen and unwinding of carry trade positions. This may reduce global risk appetite and cause capital outflows from emerging markets. In countries with high external financing needs like Turkey, upward pressure on the exchange rate and interest rates may occur. In the short term, a bearish trend in the BIST and depreciation of the TL could be seen.