What does the Bank of Japan increasing its interest rate from .25% to .5% mean and why is it causing panic in the markets?

Question

I’m no good at economics lol

In: 4812

Answer 1

They’re not increasing the rate, they’re just allowing market forces to influence the 10Y rate more than they currently are. They currently intervene in the market when the yield on the 10Y gets above 0.25%; they’re rasinging the threshold which they intervene from 0.25% to 0.50%.