(Bloomberg) — Japanese people are feeling the impact from higher interest rates at a more personal level, according to analysis of social media activity following the central bank’s latest policy decision.
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After the Bank of Japan raised borrowing costs for a third time under Governor Kazuo Ueda last week, about 80% of comments on YouTube were negative and dominated by concerns about housing loans and inflation — issues that directly affect people’s day-to-day lives.
That’s according to analysis by Tomoki Fukuma, CEO of TDAI Lab, a startup backed by Tokyo University that conducts sentiment analysis.
Fukuma analyzed remarks on videos posted on YouTube after Friday’s rate hike announcement, and compared them with equivalent comments in March and July last year, when the BOJ also pushed up rates. Around 8,500 comments in total were analyzed, Fukuma said.
The results suggest that as time goes on, the BOJ’s rate increases are having a stronger impact on people’s everyday lives, shifting from more abstract concepts to more concrete effects. While the effects of rate hikes are yet to generate the kind of opposition that might give policymakers second thoughts about taking action, the government and central bank will likely keep a close eye on public sentiment over rate moves.
Following the previous rate hikes, online discussions centered around broader economic implications. In March, comments frequently mentioned “bonds,” “companies,” and “finance,” while in July, terms like “economy,” “finance ministry,” and the names of Ueda and then Prime Minister Fumio Kishida were commonly used. After all three rate hikes, roughly four out of five comments expressed negative sentiments.
“After the latest hike, people were mostly focused on discussing the direct and specific impact of the rate hike on their personal lives, such as inflation and mortgage payments,” Fukuma said. “While the overall sentiment toward rate increases hasn’t changed much, people are now paying closer attention to how these policies impact their everyday lives.”
TDAI Lab, a startup launched in 2016 in collaboration with Tokyo University, conducts AI-driven analysis of various platforms including social media.
Last week, the BOJ raised its policy rate to 0.5%, the highest level since 2008, in a widely expected move. This marks the third rate hike in less than a year, following the BOJ’s first increase in 17 years in March 2024.
