How to grasp the opportunity as Japan ended its negative rate policy?

[antonyyu3]

Japan ended its negative interest rate policy
On March 19, 2024, the Bank of Japan announced it would raise interest rates for the first time since 2007, moving off its first-ever policy of negative rates that it began using nearly two decades ago to boost the economy. The Bank of Japan increased its overnight borrowing rate for banks to a range of between 0 and 0.1%, from minus 0.1%. Backed by the April policy meeting and economists' poll, it indicates another interest rate hike in 2024. This policy change is not only of interest to Japan's economic condition but has spillover impacts on a number of sectors.

How has it influenced the markets?
The BOJ's seismic policy shift will resonate across financial markets. The economy will have to adjust after having interest rates held down at low levels by negative rates for so many years. Here are the main affected markets.

•   Currency markets: Japan’s new policy has been affecting the weakness of its currency. the Japanese Yen plunged dramatically and hit a 34-year low against the US dollar on Tuesday, April 23, 2024. In the forex trading industry, huge market volatility has been witnessed by the investors in the past few weeks.
•   Stock market: Higher interest rates would raise the cost to business of borrowing money, which would in turn reduce corporate profits and result in lower stock prices. Investors who have an excessive allocation to Japanese equities might witness a decline in the value of their holdings.
•   Bond Market: Fixed income is very interest rate-related. Yields on Japanese government bonds are expected to rise from their extremely low levels under “yield curve control”.

Moreover, this change in policy will also have a significant impact on real estate, consumer expenditure, insurance, pension funds, etc. With a view to planning a fresh rate hike, this is likely to carry a huge impact in the long-term.


What can we do as investors?
With substantial changes taking shape across global financial systems, all investors would be wise to evaluate their portfolios carefully. The individual holding in the portfolio should be scrutinized for those that have exposures to Japanese markets or currency fluctuation. Reinvestment in Japanese bonds or other fixed-income securities can bring attractive yields under today's rate policy. Further, the weakening Yen of Japan is potentially creating opportunities in the forex market for those trading in highly volatile pairs like USDJPY, which could bring exponential returns. Ultimately, any investment decisions should be along the lines of a risk profile and goals.

For investors looking for opportunities in forex trading, partnering with a reliable broker can make things easier. JRFX is an online regulated broker offering a wide range of trading instruments, including currency pairs like USDJPY, CADJPY, GBPJPY, and many others. Zero commissions and competitive spreads, combined with 24/7 customer support, makes JRFX indeed one of the best choices among many for global investors.


The information provided is for informational purposes only and should not be considered as financial advice. Trading CFDs carries risk, and investors should carefully evaluate their risk tolerance and conduct independent research.

[antonyyu3]

The global inflation trend
Recent data shows inflation slowing slightly in major economies. Though the downtrends of inflation seem to emerge in areas like the US, it still remains above the target of 2% set by central banks. According to the IMF, global inflation rate is forecast to 5.9% in 2024 and 4.5% in 2025. Even as it declines steadily, consistent high inflation globally remains a primary concern for the economic and market outlook.

How does it impact investors?
As for Investors, they are usually not huge fans of inflation since high inflation shrinks the buying power of savings and assets. Your house and real estate holdings become less valuable. The bonds you’re holding are less favorable. As high inflation continues, wealth preservation is a real thing and investors should take it seriously. Without proper management, pensions and long-term savings plans also face inflation risk. That’s why finding investments that outpace inflation has become critical for protecting your wealth.

How to protect and increase your wealth against inflation
Several ways of investments can inspire investors to adjust their portfolios and generate returns against inflation.

•   Contracts for difference (CFDs) trading: CFDs allow investors to profit from price movement without owning the underlying assets. Investors with high-risk tolerance can profit whether markets rise or fall and potentially make significant returns during inflation.
•   High-yield savings accounts: Earn higher interest than traditional accounts by exploring different options and finding the best rates.
•   Reallocate bonds: During high inflation, readjust bond holdings to equities. For example, 35% of the S&P 500 is in tech and communication sectors, which are capital-light businesses. Generally, they tend to outperform during high inflation.
•   Treasury Inflation-Protected Securities (TIPS): TIPS are a type of bond designed to adjust in value based on inflation so returns keep pace with rising prices.
•   Real Estate Investment Trusts (REITs): REITs offer higher yields than bonds and growing income streams through rents and leases. Unlike real estate, REITs are more liquid investments and normally their prices are resistant to inflation.

For safe, secure CFD trading, JRFX can be one of the options among investors. Founded in 2010, JRFX is a regulated online broker offering a wide range of trading assets and advanced trading tools. With 0 commission fee, competitive spreads, and 24/7 customer support, it empowers investors to explore their potential gains and provides an effortless trading experience. The transparency, the ability to deposit with $1, and the accessibility via desktop and mobile app make it one of the best user-friendly trading platforms.


Trading CFDs carries a degree of risk, and it may not be suitable for all investors. It is essential to conduct thorough research, seek professional advice, and understand the risks involved before engaging in any investment activity.

[boyptc]

Japan's YEN is truly down right now. So, those that are optimistic that they'd recover soon, you can buy their currency whichever platform you are confident with.

But another thing with this is to take advantage of their currency's weakness through visiting them.

Yeah, travel to Japan as your currency will have a better exchange on their YEN.