Explained: Why Japan's Nikkei soared to lifetime high even after BOJ hiked interest rates to 31-year high

Bank of Japan raised its short-term policy rate to 1% from 0.75%, a 31-year high, yet the Nikkei 225 surged over 1% to a lifetime high above 70,000 as the move was seen as expected and not hawkish enough to trigger sharp yen repricing. A US-Iran peace deal framework that would reopen the Strait of Hormuz further boosted global risk sentiment, with India's Sensex and Nifty also trading higher. Deputy Governor Shinichi Uchida noted diminishing growth risks from the Middle East conflict but flagged broadening inflationary pressures.