Bitcoin and yen hold steady as Japan's inflation eases and BOJ keeps interest rates unchanged

1 hour ago7 min read

In a week where global markets held their breath for central bank cues, Japan delivered a nuanced, two-part message that left the yen and Bitcoin in a state of cautious equilibrium. The Bank of Japan, as widely anticipated, held its benchmark interest rate steady in a range of 0% to 0.1%, maintaining its last-in-class dovish stance among major economies. This decision, however, landed alongside fresh data showing the nation's core inflation rate, which excludes volatile fresh food prices, cooled to 2.2% in April from 2. 6% the prior month, edging closer to the BOJ's elusive 2% target.For currency traders, the unchanged rate was a green light to keep the yen under pressure, as the colossal interest rate gap with the hawkish Federal Reserve remains a fundamental anchor. Yet, the softer inflation print tempered fears of immediate, aggressive BOJ tightening, preventing a full-scale yen rout and creating a fragile stability.This environment proved to be a neutral-to-positive backdrop for Bitcoin, which has recently shown a sensitivity to Japanese monetary policy shifts. The crypto asset found footing, trading sideways as the 'no surprise' outcome from Tokyo removed a layer of macro uncertainty.Analysts note that Bitcoin's resilience here is being tested; it's no longer just a speculative tech bet but is increasingly watched as a barometer for global liquidity expectations. The BOJ's next move—a potential reduction in its massive bond-buying program—is now the critical date on the calendar. For investors from Wall Street to crypto-native funds, Japan's delicate dance between supporting a fragile economic recovery and defending a battered currency is becoming a central plotline in the second half of 2024, with implications far beyond its own shores.

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#Bank of Japan

#interest rates

#inflation

#monetary policy

#Bitcoin

#yen

#forex

#macroeconomy