The Bank of Japan's (BOJ) decision, which came at the end of a two-day monetary policy board meeting, highlights confidence in the ongoing moderate recovery in the world's second largest economy.The vote among the nine-member board was 8-1 in favor of the hike.
Specialists say the expectations indicated that direction so the markets were not shocked by the decision. They also predict international investors will not rush to Japanese markets while the interest rates are 5.25 percent in the US and 3.5 percent in the EU. "This increase may ease any possible decisions by the European Central Bank's (ECB) to increase the interest rates by quarter percentages," Mehmed Ali Yýldýrýmtürk, a financial markets specialist, said.
The BoJ's decision may cause a decline in the flow of capital to Turkey stemming from the Japanese capital markets because of the increase in their costs. But the specialists opine that the share of capital funds taken from the Japanese markets was not that high, and the capital flow to Turkey will not decline because of the high liquidity in international capital. They said this increase may affect the price of gold, however, because there are many firms investing in gold with Japanese loans.