BOJ Hawkish Shift Sparks Market Volatility

The Bank of Japan has signaled that it may move faster than expected to raise interest rates, shifting the baseline assumption for Japanese equities and putting pressure on valuations.

This change in policy is reflected in rising government bond yields, which increase borrowing costs across the economy and have a lagged impact on corporate balance sheets.

Nearly half of Japanese firms say rate hikes have already hurt them, giving this policy shift a concrete business impact beyond market pricing.

The Nikkei 225 opened flat at 68,308, but the combination of a hawkish central bank summary and widespread corporate stress makes the calm open worth watching closely as the session develops.