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The policy interest rate is an important indicator that affects the economy, price, stock price, bonds, and currency.
Depending on the interest and interest of the central bank, the expectation of the market that is easy to borrow money will change.
In this article, we will organize the basics of policy interest, the impact of interest and interest, and the points to be viewed by investment for beginners.
What is policy interest rate?
The policy interest rate is a reference interest rate used by the central bank to adjust the economic and price.
In Japan, the Bank of Japan and the United States are responsible for financial policies.
Simply say, the policy interest rate is a政策 that adjusts whether it is easy to borrow money or difficult to borrow.
| Policy | 意味 | Purpose |
|---|---|---|
| 利上げ | Make it hard to borrow money | Inflation suppression, refrigerant overheating |
| 利下げ | Make money easier | Economic support, consumption and investment |
When the policy interest rate is moving, it is bound to m gage, corporate loan, deposit interest rate, national bond yield, currency exchange, and stock price.
Therefore, policy interest rates for investors are an important indicator to see the flow of money throughout the economy.
Why policy interest rate is important
Interest rate is often described as " price".
If the cost of borrowing money is higher, companies and individuals will be careful of borrowing.
On the other hand, if the cost of borrowing money is lower, consumption and investment will be easier.
The impact of policy interest rate spreads as follows:
| Contact Us | Major Changes |
|---|---|
| Company | Changes in borrowing costs, capital investments and profits |
| Home | Changes in m gage, consumption and saving behavior |
| Bonds | Yield and price change |
| 為替 | The attractiveness of currency changes through interest rate differences |
| Shares | Calする corporate profit and valuation |
In other words, policy interest rate is not just a central bank number.
It is the starting point to change the viewpoint of the stock market and the foreign exchange market.
Impact of interest
Interest is that the central bank raises the policy interest rate.
The main purpose is to suppress inflation and cool down the overheating of the scene.
Impact on Scenic
If the borrowing cost rises due to the increase in interest, companies and households are less likely to borrow money.
As a result, the following changes become easier.
| 項目 | Ease of change |
|---|---|
| Corporate investment | Careful capital investment and adoption |
| Individual consumption | Easy to purchase and expensive consumption |
| Price | Demand is calm and inflation pressure is weakened |
Interest is a policy that brakes the spect.
However, there are some aspects that make it possible to gain because of the strong sense of view.
It is important to see not only the interest rate rise itself, but also the background of interest rise.
Impact on the stock market
In general, the interest is likely to be inverted to the stock market.
However, the company's borrowing cost increases, and the profit becomes more overwhelming.
In addition, as the interest rate increases when利益 future profits to present value, it becomes easier for companies with a high growth expectation to fall.
Especially easy to understand is the following stocks:
| Type | Easy to understand |
|---|---|
| Gloss Corporation | Great expectations for future profits and weaker discount rates |
| High Tech | High dependency on growth and future revenue |
| Companies with high borrowings | Inc ing payables is easy to compensate for profits |
However, there are some industries where interest rate rise can lead to revenue improvement like financial stock.
I want to check not only the entire stock market, but also the differences by industry.
Impact on the Bond Market
Interest rate and bond price basically move in reverse direction.
`r ↑ → Pbond ↓`
When the interest rate rises, the yield of newly issued bonds increases.
Then, the attractiveness of existing bonds that were previously issued in low yields is lowered, and the price is easier to fall down.
Note that the risk of price ctuations is increased on the interest rate rise section.
Impact on Forex Markets
In the exchange market, the currency of the country with high interest rate tends to be easier to buy.
For example, if the U.S. interest is raised and the Japanese interest rate remains low, it will be easier to move in the dollar and yen direction.
However, the exchange rate is not determined by the interest rate difference.
It also affects economic, political, geopolitics, trade balance, and market life.
Effects of Interest
Interest is to lower the policy interest rate.
The main purpose is to improve economics, improve consumption and investment.
Impact on Scenic
With lower borrowing costs, companies and households make money easy to use.
The expected effect is as follows:
| 項目 | Ease of change |
|---|---|
| Corporate investment | Easy to invest and research |
| Individual consumption | It is easy to reduce the burden of m gage and expensive consumption |
| 景気 | More money flow and more economical |
Interest is a policy to take on景elerator.
However, if the economic deterioration is serious, consumption and investment may not be returned immediately even if you gain.
Impact on the stock market
In general, the interest rate is prone to the stock market.
The company's borrowing cost is lower, and the expectation for growth investment and profit improvement is increased.
In addition, the attractiveness of the shares becomes easier relative to the loss of the bond yield.
However, it is not possible to say that it is a stock high if it is a profit.
If interest falls as a counter for economic deterioration, the market may be wary of deterioration of corporate performance than financial mitigation.
What is important is why you lowered interest rather than interest itself.
Points to invest
When viewing the policy interest rate, it is important not to judge only the current interest rate level.
The market reads how the central bank will move next.
Interest Rate Direction
The first thing to see is whether the interest rate rises or the flow down.
| Direction | Market-friendly |
|---|---|
| 利上げ継続 | Inflation warning, loss of valuation of shares |
| 利下げ転換 | Expectations for economic support, but also consciousness of the risk of exacerbation |
| Contact Us | The statement is important to read the following one hand |
The future direction may move from the level of interest rate.
Central Bank
The market is not only determining policy interest rates, but also the statements and press conferences of the Central Bank.
In particular, the following contents are:
| Message | Market view |
|---|---|
| Strong inflation | Easy to be aware of interest co ity |
| Be wary of economic slowdown | Increased interest expectations |
| Check prices and s | Market is easy to shake by waiting for judgment |
Even if the same interest rate is set up, the market reaction will change depending on whether it isカ orト.
Inflation rate
Policy interest rates are strongly related to inflation rates.
When the price rises strongly, the central bank makes it easier to select interest and maintain high interest rate.
On the other hand, if the inflation calms down, and the striking is weak, the interest becomes more conscious.
Investors need to check the price,, and spect in a set.
Common failures
News
If the policy interest rate is not announced, the market may move greatly.
However, some presentations are pre-woven.
What is important is the difference between pre-expectations and future s.
For example, “Is the next interest suggested?” may affect the market rather than “expected interest”.
Determine only interest rate
Interest is important, but it is only one of the factors that determine the market.
Actually, business performance, economics, geopolitics, exchanges, supply and demand, and market life are also moving simultaneously.
By looking at the policy interest rate only, you can easily overlook the background of the market.
The policy interest rate is an important reference interest rate of the central bank to adjust the economic and price.
The interest works in the direction of reducing economic and inflation, and the interest works in the direction of supporting the economic.
As the impact on stocks, bonds and exchanges is large, investors need to see not only the level of policy interest, but also the direction and background.
First,
Is the central bank wanting to cool the economy?
The interest rate news and market movements are easier to connect.