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November 7, 2026
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Global Markets React as Bank of Japan Raises Rates to Highest in 30 Years Amid Cooling US Inflation

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Global stock markets experienced an upswing on Friday in response to the Bank of Japan’s decision to increase its key policy rate to 0.75%, marking the highest level since 1995. This 0.25 percentage point hike was broadly anticipated and brought Japan’s benchmark 10-year government bond yield above 2% for the first time since May 2006. The move helped propel the Nikkei 225 index up by 1% to 49,507.21, leading gains across Asian markets.

Alongside this, the U.S. reported a larger-than-expected easing in inflation for November at 2.7%, sparking optimism about potential future Federal Reserve rate cuts as the U.S. labor market shows signs of cooling. This sentiment supported rises in various indices, including Hong Kong’s Hang Seng index, which climbed nearly 0.8% to 25,690.53, and Seoul’s Kospi, which increased by 0.7% to 4,020.55. Australia’s S&P/ASX 200 also improved by 0.4%, reaching 8,621.40.

European indexes showed moderate gains, with Germany’s DAX up 0.2% to 24,241.32 and France’s CAC 40 moving 0.1% higher to 8,156.83. The UK’s FTSE 100 edged up slightly, gaining less than 2 points to close at 9,838.83. The market response followed the Bank of England’s recent rate cut and the European Central Bank’s decision to hold rates steady.

U.S. futures recorded modest gains, with the S&P 500 futures rising 0.3% and Dow Jones Industrial Average futures increasing by 0.1%. The stock market was further buoyed by strong tech sector performance, highlighted by Micron Technology’s impressive 10.2% jump due to robust quarterly results and a positive outlook. Nvidia also gained 1.8%, despite ongoing investor caution over potentially inflated valuations in the AI sector. Shares of Oracle and Broadcom fluctuated amid these concerns.

In energy markets, U.S. crude oil prices fell slightly to $55.84 per barrel, while Brent crude declined to $59.61 per barrel. The euro weakened marginally against the U.S. dollar, and Bitcoin’s price climbed about 3.9% to approximately $88,000.

Additionally, Trump Media & Technology Group saw a remarkable jump of 41.9%, narrowing its substantial losses for the year, driven by its move into new ventures including nuclear power through a merger with TAE Technologies.

Market analysts noted that the Bank of Japan’s rate hike was well communicated in advance, helping to temper market volatility and maintain investor confidence. The upcoming inflation data for December may provide clearer insight into longer-term economic trends, especially in the United States following recent disruptions from the government shutdown.

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