USD/JPY (^USDJPY) rose by +0.41% on Friday. The yen tumbled to a 2-week low against the dollar on Friday, despite the BOJ raising interest rates by 25 bp, as two BOJ members dissented and wanted no change in interest rates, signaling opposition to tighter BOJ policy. Also, Friday’s weaker-than-expected Japan Aug national CPI report was dovish for BOJ policy and undercut the yen. In addition, higher T-note yields on Friday also weighed on the yen. The yen recovered from its worst level on Friday after crude oil prices fell more than -1%, a positive factor for Japan’s economy and the yen, as Japan imports more than 90% of its energy.

Japan’s Aug national CPI rose +1.9% y/y, unchanged from July and weaker than expectations of +2.0% y/y. Aug national CPI ex-fresh food and energy rose +1.9% y/y, unchanged from July and weaker than expectations of +2.0% y/y.

As expected, the BOJ raised its overnight call rate today by 25 bp to 1.25% from 1.00% in a 7-2 vote, and BOJ Governor Kazuo Ueda said the BOJ intends to keep raising the rate in response to economic and price conditions.

Markets are pricing in an 18% chance of a +25 bp BOJ rate hike at the next policy meeting on October 30.

December COMEX gold (GCZ26) closed up +25.20 (+0.57%) on Friday, and December COMEX silver (SIZ26) closed up +1.054 (+1.59%).

Precious metals prices erased early losses on Friday and settled higher. Gold and silver climbed to 1-week highs on Friday as short covering emerged in precious metals after the dollar index fell from a 7-week high and turned lower. Also, Friday’s -1% fall in crude oil prices eased inflation expectations and could prompt the world’s central banks to ease their monetary policies, a bullish factor for precious metals. Silver prices also found support last Friday on signs of stronger industrial metals demand in Europe after ECB President Christine Lagarde said economic growth in the Eurozone is a bit more promising than we thought.

Gold prices initially moved lower on Friday after the dollar index rallied to a 7-week high. Higher global bond yields on Friday were also bearish for precious metals. In addition, Friday’s BOJ rate hike of 25 bp is negative for precious metals.

Recent fund support for precious metals is bullish for prices, as long holdings in gold ETFs climbed to a 6.5-month high on Friday. Long holdings in silver ETFs rose to a 5.5-month high on August 25.

Strong central bank demand for gold is supporting gold prices, after news last Monday that bullion held in China’s PBOC reserves rose by +650,000 ounces to 76.73 million troy ounces in August, the largest increase in three years and the twenty-second consecutive month the PBOC boosted its gold reserves.

On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com

Why higher rates are squeezing stocks

The mechanical problem for stocks is fairly straightforward once you break it down.

Higher rates make borrowing more expensive across the economy and push bond yields up, making fixed income more competitive with equities for investment dollars. The 10-year Treasury yield sitting above 5%, its highest level since 2007, now looks like a genuinely attractive risk-free alternative to a growing number of investors, CNBC reported.

Cramer sees this as just the beginning of a longer squeeze. “Every hike from here on will be something that will knock down stocks,” he said, arguing the Sept. 16 move likely opens a series of increases that will continue until oil prices and inflation genuinely cool off.

Wall Street strategists are not entirely aligned on how bad the eventual damage will be. Barclays raised its year-end S&P 500 target to 7,950 from 7,800 after a standout second-quarter earnings season led by technology, while flagging higher rates and inflation as ongoing risks.

Goldman Sachs, Citigroup, and JPMorgan each project the S&P 500 will end the year at or above 8,000 despite anticipating further increases before year-end, according to TheStreet.

Ed Yardeni had been calling for 8,400 on the S&P 500 this year. He just moved that to mid-2027. Higher rates and higher bond yields changed the math.

Related: Jim Cramer’s net worth: How much does ‘Mad Money’s’ stock-picking superhost make?

Cramer’s take on what investors should do now

Cramer was careful to stop short of telling viewers to abandon the market altogether. He said the universe of stocks capable of performing well in a tightening cycle is shrinking, but pointed to defensive sectors like pharmaceuticals as examples of groups that can still work even as the Fed continues to tighten.

Not everyone on Wall Street is selling the fear. Some analysts say the market is overreading the headline and the investors who get hurt are the ones who sell good businesses because a central banker raised rates by 25 basis points.

Cramer’s own bottom line ultimately split the difference between caution and outright panic.

“I think the buyers will come back,” he said, “but a lot of groups simply don’t work as long as Kevin Warsh is on the warpath.”

His parting message for viewers was simple and easy to remember: fewer stocks to buy, fewer to hold, and considerably more to sell until the inflation picture genuinely and convincingly improves.

Related: Jim Cramer has a blunt message for Amazon stock investors

This story was originally published by TheStreet on Sep 18, 2026, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.