BoJ Hike: Confidence in Japan's Economy, Not Aggressive Tightening - Matt Orton

• BoJ's rate hike reflects growing confidence in Japan's economy, not the start of aggressive tightening, says Matt Orton.
• The 25-basis-point hike was largely expected and aims to normalize policy while keeping financial conditions accommodative.
• BoJ avoids committing to a clear path of future hikes to prevent unsettling markets, allowing Japanese equities to rise.
• Matt Orton downplays yen carry trade risks, expecting some yen strengthening by 2026 as policy uncertainty fades.
• Higher rates and a weaker yen support Japanese financial stocks and corporate outlook; global investors maintain Japan exposure.

Why It Matters: BoJ's rate hike signals economic confidence and cautious normalization, not aggressive tightening, easing market fears.