Bitcoin (BTC $88,754.76) and the Japanese yen, which have recently moved in close tandem, traded largely unchanged on Friday after Japan reported a slowdown in inflation and the Bank of Japan (BOJ) kept interest rates steady.
Japan’s headline consumer price index (CPI) rose 2.1% year-on-year in December, down from 2.9% in November, while core inflation, which excludes fresh food, eased to 2.4% from 3%. Core-core inflation, which strips out both food and energy, remained firm at 2.9%, signaling persistent underlying price pressures. Analysts at ING said slowing headline inflation may encourage caution, but steady core-core inflation could support future policy normalization.
In a near-unanimous decision, the BOJ held its benchmark rate at 0.75% while raising growth and inflation forecasts for fiscal 2025 and 2026, citing continued expansionary fiscal support.
Bitcoin hovered near $90,000, and the yen slipped slightly to 158.70 per U.S. dollar. Analysts noted that the yen’s weakness could weigh on Bitcoin, given the 90-day correlation between the two is 0.84.
The 10-year Japanese government bond yield rose 3 basis points to 1.12%, reflecting fiscal concerns and expectations of future BOJ tightening. Earlier in the week, rising yields pushed global borrowing costs higher, pressuring risk assets and contributing to Bitcoin’s midweek dip below $88,000 before stabilizing.
