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

It’s not causing panic. The Japanese stock exchange nikkei fell today because it’s valued in yen, and yen went up today big time. Why did it go up? Because, as expected, Japan was the last country to increase its central bank rate, effectively reducing future yen supply, which in turn increases its value.

Tldr yen goes up = market goes down
this happens to balance out the value of the companies as the currency value goes up.