The Bank of Japan cut another rate hike this year. After a major recession that began late last week, the decision has returned to the rest of the world. On Monday, Japan’s stock market posted its worst performance since 1987.
Good news for cryptocurrencies from Tokyo. Responding to recent market volatility, the Bank of Japan said Wednesday that it is unlikely to raise rates until 2024.
The move could reduce pressure on bitcoin, which is held in stocks as a “risky” asset in relation to the monetary policy set by the Federal Reserve, and less , central banks.
Deputy Governor Shinichi Uchida said: “Japan’s economy is not at a point where the Bank will fail unless key interest rates are raised at a certain pace.” The speech in Japan
In other words, the Japanese economy does not need to be stronger.
Welcome Boost
This is a boost for Bitcoin, which is down 24% since Monday, August 2, according to CoinGecko. Ether also suffered a major decline with a 31% decline during that period.
Bitcoin has gained 15% to $57,180 by mid-morning in the UK. The rest of the crypto market followed suit.
A weak US jobs report last week sparked global selling last week as investors worried the Federal Reserve had erred by not cutting interest rates in this summer.
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The Bank of Japan also contributed to the recession by raising interest rates to 0.25% in in an effort to fight inflation, so that interest rates are stronger as a result. yes
Stress
The strong yen weighed on Japanese investors, who took leveraged positions in various banks, including US stocks.
After falling 12% on Monday, Japan’s stock market rose 10% on Tuesday and rose another 2.3% on Wednesday.
Despite recent market volatility, Uchida remains bullish on the U.S. economy, saying a soft landing is on the way. He said rising Japanese stock prices have helped boost corporate profits.
“Since there is no economic change in the two countries, the reaction to the US economic indicators on a monthly basis is somewhat exaggerated,” he said. Uchida emphasized the BOJ’s commitment to monitoring market developments and maintaining appropriate monetary policy. “I reiterate my view that the bank should continue to operate at interest rates for the time being,” he said..