BOJ Gov Reiterates Interest Rates Hike

Bank of Japan Governor Kazuo Ueda reiterated further rate hikes in a document submitted to a government panel chaired by outgoing Prime Minister Fumio Kishida, reported Bloomberg on September 3.

The recent affirmation reminded investors that despite the market meltdown triggered by the BOJ’s July rate hike, the central bank will raise borrowing costs provided the bank’s forecasts materialize. Japanese yen rose over 146 against the US dollar today after the remark.

Two-thirds of economists surveyed pointed to a rate hike again by the BOJ by the end of the year. Notably, 41% of respondents expect December as the most likely timing. On the contrary, Pacific Investment Management expected a rate hike in January.

Can Bitcoin Price and Crypto Market Crash?

As CoinGape earlier reported, Japan’s biggest brokerage firm Nomura Holdings confirmed that Japanese yen carry trades that crashed markets were making a comeback. Should the interest rate differences between the US and Japan remain elevated, more investors will enter Yen carry trades. This risks another Black Monday-type Bitcoin price crash, triggering sell-offs in the broader crypto market.

However, US Fed Chair Jerome Powell hinted at Fed rate cuts starting in September. According to CME FedWatch data, there’s a 67% odds of a 25 bps rate cut in September, with markets still expecting 100 bps rate cuts this year. This would prevent a market meltdown as the differential will narrow.

BTC price struggles to break above $60,000 amid market uncertainty. BTC pared today’s gains, with the price currently trading at $59,104. Furthermore, the trading volume has decreased by 20% in the last 24 hours, indicating a decline in interest among traders.

Conclusion

In conclusion, the Bank of Japan Governor’s recent statement has led to a hawkish outlook on monetary policy, with the Japanese yen rising against the US dollar. The central bank’s decision to raise interest rates further may lead to a Bitcoin price crash, triggered by Japanese yen carry trades. However, the possibility of Fed rate cuts in September could prevent a market meltdown. The crypto market remains uncertain, with the price of BTC struggling to break above $60,000.

FAQs

Q: What did the Bank of Japan Governor say about interest rates?
A: The Bank of Japan Governor reiterated that the central bank will raise interest rates further if the economy and prices perform as expected.

Q: What is the current outlook on the Japanese yen?
A: The Japanese yen has risen over 146 against the US dollar, indicating a hawkish outlook on monetary policy.

Q: What is the impact of Japanese yen carry trades on the crypto market?
A: Japanese yen carry trades that crashed markets are making a comeback, risking another Black Monday-type Bitcoin price crash and triggering sell-offs in the broader crypto market.

Q: What is the likelihood of a rate cut in September?
A: According to CME FedWatch data, there’s a 67% odds of a 25 bps rate cut in September, with markets still expecting 100 bps rate cuts this year.

Q: What is the current price of BTC?
A: The current price of BTC is $59,104, struggling to break above $60,000 amid market uncertainty.

Q: What is the impact of declining trading volume on the crypto market?
A: A decline in trading volume by 20% in the last 24 hours indicates a decline in interest among traders, adding to the uncertainty in the crypto market.