Bank of Japan (BOJ) Governor on Tuesday said the central bank will raise interest rates further if the economy and prices perform as expected. Japanese yen rose toward 146 against US dollar, rebounding from two-week lows amid a hawkish outlook on Bank of Japan monetary policy. Is another Bitcoin price crash imminent due to Japanese yen carry trades?
BOJ Gov Reiterates Interest Rates Hike
Bank of Japan Governor Kazuo Ueda in a document submitted to a government panel chaired by outgoing Prime Minister Fumio Kishida reiterated further rate hikes, Bloomberg reported 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.
Japan’s 10-year government bond yield climbed above 0.92%, hitting a four-week high on hawkish outlook by Bank of Japan.
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 decline in interest among traders.
Varinder Singh
Varinder has 10 years of experience in the Fintech sector, with over 5 years dedicated to blockchain, crypto, and Web3 developments. Being a technology enthusiast and analytical thinker, he has shared his knowledge of disruptive technologies in over 5000+ news, articles, and papers. With CoinGape Media, Varinder believes in the huge potential of these innovative future technologies. He is currently covering all the latest updates and developments in the crypto industry.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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