Yesterday, the Federal Reserve lowered interest rates but the market fell instead. Today, Reuters predicted that the Bank of Japan will raise interest rates by 25 basis points in December, and may continue to raise it to 1% next year. Will the market go up or down then?
Penny gives a brief analysis:
Yen interest rate hike = Japanese funds returning
Many Japanese funds had gone overseas in search of returns due to low domestic interest rates. Now, with Japan raising rates, money might return to Japan, slightly tightening global liquidity.
This may lead to short-term volatility:
With slightly less liquidity, the upward momentum of $BTC and $ETH may be weaker, making it easier to fluctuate.
But the impact won't be too significant:
Even if Japan's benchmark interest rate rises to 1%, it will still be relatively low globally, and the rate hike has long been anticipated by the market, limiting its impact.
In the long term, it may actually be a positive factor.
The end of Japan's "ultra-low interest rate era" indicates an improving economy, which is not a bad thing for global risk appetite.
Moreover, many institutions in Japan are very friendly towards BTC, and the domestic compliant market is also expanding, meaning demand may continue to rise.
