BoJ Rate Hike Fails to Deter Risk Sentiment Rally

The US Dollar remains strong after the BoJ's interest rate decision last week. Despite this, stocks are rising and positive risk sentiment is returning. The Japanese Yen weakened despite the rate hike, highlighting how expectations can influence FX markets.

Investors seem to be becoming more comfortable with risk, as crypto is also moving higher. This suggests that a stronger Dollar does not necessarily translate into weaker risk assets. When investors become confident about the economic outlook, equities and other growth-sensitive assets can attract demand even while US interest-rate expectations support the USD.