Bank of Japan hiked interest rates for the first time in 17 years, the Japanese Yen instead of strengthening, it crashed. The Japanese economy is in the making with a higher inflation to come and a weaker yen. $Japanese Yen - main 2406(JPYmain)$
When a central bank increases its interest rate, its currency should appreciate because investors depositing their money will now earn interest. This should attract investors to buy into the yen, causing it to rise. However, the opposite has occurred since March 18th.
What could be the reason the yen may continue to sink further despite potential rate hike in the future?
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