Photo credit: Soichiro Koriyama/Bloomberg

A former Bank of Japan board member, Makoto Sakurai, claimed that the central bank won't be able to raise the policy rate again for “the rest of the year.”

Although the interest rate hike disrupted the global market, Sakurai, in an interview with Bloomberg, mentioned, “It’s good that they decided to move from a world of almost zero interest rates to a normal 0.25%.” The former board member further advised that the Bank of Japan should “wait and see for a while” regarding further hikes.”

Apart from the increased policy rates, the Bank of Japan’s communication style was not well received. Criticizing the communication style of Kazuo Ueda, the governor of the Bank of Japan, Sakurai claimed:

“The BOJ is moving from excessive monetary easing to appropriate monetary easing, and the biggest problem is that Ueda failed to communicate firmly that they will maintain easing. That’s always been a condition they’ve kept.”

Sakurai further pointed out that Ueda had given the impression that he would “raise the interest rate more and more.”

When the central bank of Japan made a bold move by increasing its interest rates to 0.25% from a range of 0 to 0.1% on July 31, several traders began to unwind their carry trade positions, further causing multiple markets to record negative performance and experience increased volatility. 

Earlier, the Byteline reported that the unwinding carry trade position was one of the factors that caused the crypto market to witness a massive liquidation activity on Aug. 5. At the same time, cryptocurrencies, including Bitcoin (BTC), dropped in value. 

On Aug. 5, Bitcoin (BTC) closed its trade at $53,956, even though it started at $58,006 in the same day. Currently, BTC is trading at $59,721.10 after experiencing a 1.3% decline over the past 24 hours, according to CoinGecko.