The anticipated increase in Japanese interest rates and its limited impact on the crypto market
Current estimates indicate that the expected rise in interest rates on the Japanese yen will not cause a strong shock in cryptocurrency markets, unlike the previous hike that led to a wave of risk aversion and a drop in Bitcoin's price from around 65,000 dollars to nearly 50,000 dollars.
The difference this time is due to two main factors:
Firstly, speculators now hold net long positions on the yen, which reduces the likelihood of a sudden reaction or large unwinding of carry trades following the Bank of Japan's decision.
Secondly, yields on Japanese government bonds, both short and long-term, have seen a gradual increase throughout the year and have reached levels considered the highest in decades, indicating that markets have already absorbed this change. Thus, the upcoming rate hike seems more like a reflection of market reality than a shocking move.
In contrast, the US Federal Reserve has moved to cut interest rates by 25 basis points, bringing them to their lowest levels in three years, alongside the launch of additional tools to inject liquidity, which alleviates pressures on high-risk assets, particularly cryptocurrencies.
