Business
Japan’s rate hike signals new tightening phase | The Express Tribune
BOJ raises short-term rate to 30-year high, driven by persistent inflation, economic worries
The Bank of Japan (BOJ) has raised its benchmark interest rate to 0.75%, marking its highest level in three decades. The move, which took place after a two-day policy meeting, comes as the country grapples with persistent inflation and concerns about its economic future, the Associated Press (AP) has reported.
The rate hike of 25 basis points follows several previous increases in 2024, culminating in this policy change, which was widely expected by analysts. The BOJ’s decision signals a new phase of monetary tightening after years of ultra-low rates designed to stimulate Japan’s economy. The 0.25-percentage-point hike took the BOJ’s benchmark short-term rate to 0.75%, its highest level since September 1995. It will raise costs for mortgages and other loans. The BOJ also indicated that it might raise rates further in the future, depending on economic conditions.
According to Xinhua news agency, it is the first rate increase since January and also the first under the administration of Prime Minister Sanae Takaichi, who advocated an aggressive fiscal policy and monetary easing.
Reasons for rate cut
The BOJ’s decision to raise rates stems from a combination of economic factors that have pressured the central bank to pivot away from its historically low interest rates.
For years, Japan struggled with deflation, which is when prices fall, leading to reduced consumer spending and investment. In response, the BOJ kept interest rates near zero or negative, hoping to stimulate the economy by encouraging borrowing and spending. However, this strategy has faced challenges, especially with inflation rising faster than expected.
As of November 2024, Japan’s inflation rate was recorded at 3%, above the BOJ’s target of 2%. This sustained inflationary pressure has forced the central bank to act.
BOJ Governor Kazuo Ueda explained that the rate increase aims to ensure inflation remains consistent with the central bank’s 2% target. He added that inflationary pressures had risen moderately, and with the labour market showing signs of improvement, the BOJ could no longer justify maintaining its ultra-loose monetary policy.
However, Ueda stressed that the rate hike is still a cautious step, with real interest rates remaining in negative territory. Since Takaichi took office, the yen has sharply depreciated amid concerns that her expansionary policy would further deteriorate Japan’s fiscal health, prompting the selling of the currency and government bonds.
Implications for economy
The immediate impact of the rate hike was felt in both Japan’s currency and bond markets. The yen briefly weakened against the dollar, falling to the lower 156 range, while the yield on Japan’s 10-year government bonds rose to 2.02%, its highest level since 1999.
Rising bond yields, particularly on long-term government debt, could make borrowing more expensive for both consumers and businesses, potentially slowing economic growth. For Japanese consumers, the rate hike could lead to higher borrowing costs, especially for mortgages and personal loans. The cost of living has already risen in recent months due to higher prices for imported goods like food and energy, exacerbated by the depreciation of the yen.
While the rate hike may support the yen in the long run, providing some relief from inflationary pressures stemming from imports, it could also increase the burden on consumers already struggling with rising costs. On the other hand, the rate increase could offer higher returns on savings deposits, benefiting individuals who have invested in fixed-income assets. However, the potential rise in borrowing costs may slow down consumer spending, a critical engine of Japan’s economic growth.
The BOJ’s decision to raise rates comes at a time when most other major central banks, such as the US Federal Reserve and the European Central Bank, have either paused or begun to cut interest rates to support slowing economies.
While the US and Europe grapple with slower economic growth and the aftermath of the pandemic, Japan’s inflationary pressures and concerns about fiscal health have prompted the BOJ to shift its approach. The weakening yen, which has depreciated against the dollar in recent years, has also contributed to higher inflation in Japan.
Risks and challenges
The decision to raise rates is not without risks. Japan’s economy is still fragile, and the recent GDP contraction of 0.6% in the third quarter of 2025 highlighted the ongoing challenges faced by the country. Rising interest rates could further dampen consumer spending and investment, possibly pushing the economy into a deeper slowdown.
Moreover, Japan’s high levels of public debt, estimated at nearly 230% of GDP, present a big challenge. As borrowing costs rise, the government may face higher costs to service its debt, which could strain fiscal policy.
New Delhi: The Reserve Bank of India (RBI) has kept the repo rate unchanged at 5.25 PERCENT in its February 2026 monetary policy review, maintaining a neutral policy stance as inflation pressures remain under control and economic growth stays stable.
The decision was announced by RBI Governor Sanjay Malhotra after the three-day meeting of the Monetary Policy Committee (MPC), which began on February 4 and concluded on February 6.
Focus on Inflation and Growth
The MPC chose to pause after a series of rate cuts over the past year, preferring to evaluate how earlier policy changes are affecting borrowing costs, liquidity, and overall economic activity.
Inflation has remained within the RBI’s comfort range, giving policymakers room to maintain the current rate while monitoring global economic conditions and domestic demand.
The RBI’s monetary policy framework aims to keep inflation close to 4 PERCENT with a tolerance band of 2–6 PERCENT, which continues to guide interest-rate decisions.
Impact on Loans, EMIs, and Markets
Since the repo rate directly influences borrowing costs for banks, the decision to keep rates unchanged means loan EMIs are unlikely to change immediately. However, banks and financial markets will continue to watch RBI signals on liquidity and future rate moves.
The central bank has already reduced rates by about 125 basis points since early 2025, which helped support economic growth while inflation eased.
What Happens Next
Economists believe the RBI may now focus more on policy transmission and liquidity management rather than further rate cuts in the near term.
Governor Malhotra is expected to outline the RBI’s outlook on inflation, growth, and financial stability in the coming quarters during the post-policy press conference.
Business
$2 trillion wiped off crypto markets! Bitcoin halves since October; investor company shares sink to multiyear lows – The Times of India
Cryptogiant Bitcoin has suffered sharp losses since the beginning of 2026, tumbling over 20%. The digital currency has given up almost half of its value since October’s record peak of over $124,000, sliding to $67,000, now worth less than it was at the start of President Donald Trump’s second term. Bitcoin is often pitched as “digital gold” as its returns are just like gold, offering no dividends or profits and price driven by what investors are willing to pay. The world’s largest cryptocurrency was last trading 1.64% higher at $64,153.24 after a volatile session that saw prices swing between gains and losses, having earlier touched a low of $60,008.52. The global crypto market has lost $2 trillion in value since peaking at $4.379 trillion in early October, with $800 billion wiped out in the last month alone, Reuters reported. Bitcoin has declined 28% so far this year, while ether has lost nearly 38% over the same period.As the asset slid, shares of companies holding bitcoin and other digital assets also came under heavy pressure amid ongoing turbulence in the cryptocurrency market, fuelling concerns about stress across the sector. Publicly listed firms that piled into crypto last year, encouraged by US President Donald Trump’s supportive stance, are now grappling with intensifying market challenges.The decline comes as uncertainty over Federal Reserve rate cuts and concerns over AI company valuations weigh on risk assets, pushing bitcoin to its lowest level since November 2024.Strategy shares plunge to multi-year lowsMicroStrategy’s bitcoin-focused arm, Strategy, has seen shares tumble from $457 in July to $111.27 on Thursday, marking their lowest level since August 2024. The stock was last down more than 11%, according to Reuters.In December, Strategy cut its 2025 earnings forecast, citing weak bitcoin performance, and announced plans to create a reserve to support dividend payments. The company now expects full-year earnings between a $6.3 billion profit and a $5.5 billion loss, down from its earlier forecast of $24 billion.Other notable bitcoin buyers have also been hit. UK-based Smarter Web Company (SWC.L) fell nearly 18%, Nakamoto Inc (NAKA.O) lost almost 9%, and Japan’s Metaplanet (3350.T) dropped over 7%.Bitcoin wipes out gains since Trump’s electionBitcoin itself is down nearly 28% since the start of the year, with recent selling accelerating after Trump nominated Kevin Warsh as the next Federal Reserve chair. Analysts cited by Reuters say that Warsh’s appointment could lead to a smaller Fed balance sheet, a negative for speculative assets like crypto.Bitcoin has erased all gains made since Trump’s election, when he pledged to overhaul policies toward digital assets. The cryptocurrency last traded at $67,651.“As Bitcoin continues its slide below the psychological barrier of $70,000, it’s clear the crypto market is now in full capitulation mode,” said Nic Puckrin, investment analyst and co-founder of Coin Bureau. “If previous cycles are anything to go by, this is no longer a short-term correction, but rather a transition… and these typically take months, not weeks,” Reuters cited the expert.Broader digital asset holdings also hitCompanies holding other tokens have been affected as well. Alt5 Sigma, which stocks the Trump family’s WLFI token, fell 8.4%. SharpLink Gaming, holding ether, dropped 8%, while Forward Industries, which holds solana, fell nearly 6%.Bitcoin fell to a low of $63,295.74 on Thursday, its weakest since October 2024, before rebounding slightly to $63,525, marking its largest one-day drop since November 2022. Approximately $1 billion in bitcoin positions were liquidated over 24 hours, according to CoinGlass data.Fed concerns and investor outflowsTrump’s Fed pick, Kevin Warsh, has added to market fears. Analysts say investors worry that a smaller balance sheet will remove liquidity support for speculative assets.“The market fears a hawk with him,” Manuel Villegas Franceschi from Julius Baer told Reuters. “A smaller balance sheet is not going to provide any tailwinds for crypto.”Deutsche Bank analysts highlighted massive outflows from institutional ETFs as a key driver of the decline. US spot bitcoin ETFs saw over $3 billion withdrawn in January, following $2 billion and $7 billion outflows in December and November, respectively. “This steady selling in our view signals that traditional investors are losing interest, and overall pessimism about crypto is growing,” they said.Tech sector weakness piles pressure on crypto segmentThe slide in cryptocurrencies has been compounded by a broader downturn in tech stocks, particularly software companies linked to AI. Bitcoin and other tokens have historically tracked risk appetite in technology markets, and the current weakness has intensified losses.“Concerns are being raised around the crypto miners and whether we could be looking at forced liquidations if prices continue to fall, which could lead to a vicious cycle,” said Jefferies strategist Mohit Kumar, as cited by Reuters. The analyst further added that crypto “should never be more than a very small portion of a portfolio, but its heavy retail ownership adds to overall market risk.”
Business
RBI MPC Meeting 2026 Live Updates: Gov Sanjay Malhotra To Announce Decision On Repo Rate Today
RBI MPC Meeting February 2026 Live Updates: All eyes are on the Reserve Bank of India (RBI) governor, Sanjay Malhotra, today as he is going to announce the decision of the Monetary Policy Committee (MPC) February policy meeting, which started on February 04. The outcome, due shortly, will set the tone for interest rates, liquidity conditions, and market sentiment at a time when growth is steady but inflation risks haven’t fully disappeared.
The six-member MPC, headed by RBI Governor, has deliberated on domestic inflation trends, global uncertainty, crude oil prices, and the evolving growth outlook.
The decision will be announced by RBI Governor Sanjay Malhotra amid a supportive domestic backdrop of a growth-oriented Union Budget, easing inflation pressures and a major easing of external uncertainty following the long-awaited India-US trade deal.
RBI Governor will begin his speech at 10:00 AM. The Central bank had cut the repo rate by 25 bps to 5.25 per cent from 5.50 per cent with a ‘neutral stance’ in its December monetary policy.
This time, expectations are mixed. While retail inflation has shown signs of cooling, it remains close to the RBI’s comfort zone. At the same time, global central banks are turning more cautious on rate cuts, which could influence RBI’s tone and forward guidance.
Markets will closely track not just the rate decision but also the RBI’s commentary on inflation risks, growth projections, liquidity management, and its stance going forward.
Stay tuned with us to watch the live coverage of RBI MPC February Meeting 2026
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