Bank of Japan Hikes Rates, Bitcoin Gains as Yen Slides
The Bank of Japan (BOJ) raised its short-term policy rate by 25 basis points to 0.75%, the highest level in nearly 30 years, signaling a gradual shift away from decades of ultra-loose monetary policy.
Following the announcement, Bitcoin (BTC $88,471.90) climbed from $86,000 to $87,500 before stabilizing near $87,000, while the yen weakened to 156.03 per U.S. dollar from 155.67.
The BOJ noted that inflation has remained above its 2% target due to rising import costs and stronger domestic prices. However, real interest rates remain negative, meaning monetary conditions are still accommodative despite the hike.
The move was largely anticipated. Long-held yen positions limited sharp appreciation, and concerns about a broad unwinding of carry trades were overstated. Japan’s low rates have long made the yen a preferred funding currency for global carry trades. Even after the hike, Japanese rates remain well below U.S. levels, easing pressure on risk assets worldwide.
