BoJ’s recent announcement is more significant than Powell’s Jackson Hole speech for a number of reasons that are deeply intertwined with the current global economic landscape, especially given the context of potential recessionary pressures. Japan, with its historically low interest rates, has been a linchpin of global financial markets through the carry trade—a strategy where investors borrow in a currency with low interest rates, like the yen, and invest in assets denominated in currencies with higher yields. This strategy has helped fuel global asset bubbles and has been a critical source of liquidity for financial markets. Now, with the Bank of Japan signaling that rate hikes are firmly on the table, the global economic implications could be profound.