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 now twice as expensive as before to get a loan. Which means investing is much more expensive, and there will be less of it.

Imagine that every child on a street had their allowance cut in half. The ice cream man would be in a panic. There’s far less money floating around; business is going to be terrible.