Nikkei nosedives, overnight call rate up, Bank of Japan injects one trillion yen into the financial system

August 10, 2007
By Ken Worsley

On Thursday, Credit Suisse’s study of market interest rates placed the likelihood of a rate hike coming from this month’s Bank of Japan Policy Board meeting at 64 percent. Then, today happened: The Nikkei fell 406.51 points, the overnight call rate went from 0.50% to 0.55%, and the Bank of Japan injected one trillion yen into the nation’s financial system (which helped bring that rate back down to 0.49%).

Today, Credit Suisse’s study rated the possibility of an August rate hike at 26 percent.

I’m still holding steady at 65% - let’s see what Monday looks like…there’s still plenty of time for re-evaluation, especially if it’s true that 60% of the value of a rate hike has already been figured into prices.

Filed Under Bank of Japan, Monetary Policy