The main inflation number slowed for the first time in four months. This showed that the cost of daily goods is not rising as fast as before. The yearly rate dropped to 2.1 percent from 2.9 percent in November. This gave hope that price pressure may slowly cool in the coming months.
The core inflation rate which removes fresh food also moved lower. It fell to 2.4 percent from 3 percent. This means some parts of the market are calming. But not all prices are slowing. The core core inflation which removes food and energy stayed high at 2.9 percent. This shows that basic prices are still rising in many areas. It means people still feel pressure when they shop or pay for services.
Because of this mixed data the Bank of Japan decided to keep interest rates the same. The main rate stayed at 0.75 percent. The bank also raised its future growth and inflation outlook. This shows that the economy is still expected to grow even though prices are not falling fast. The bank said it will move carefully and watch the data before making changes.
After the news Bitcoin stayed near 90000. It did not move much during the day. The Japanese yen became slightly weaker against the US dollar. It moved to around 158.70. Some experts believe the yen may stay weak for a while. In recent weeks Bitcoin and the yen have been moving in a similar way. When one changes the other often follows. Because of this link some think a weak yen could affect Bitcoin in the short term.
At the same time the yield on the ten year Japanese government bond rose. It moved to 1.12 percent. This shows that investors expect higher rates in the future. It also shows concern about government spending and taxes. With elections coming some fear that more spending could raise debt. These worries pushed yields higher earlier in the week.
When Japanese yields rise it can affect markets around the world. Borrowing becomes more costly. This puts pressure on risk assets like stocks and digital assets. Earlier in the week Bitcoin fell to around 88000 before moving back near 90000. Over the last day it stayed mostly flat.
This situation shows how closely global markets are linked. What happens in Japan can affect currencies bonds and even digital assets. Inflation data and central bank actions play a big role in shaping investor mood. When prices stay high and rates may rise people become more careful.
For now the Bank of Japan is watching both price data and growth. Bitcoin traders are also watching these signals. If inflation stays firm and yields keep rising markets may remain slow. If prices cool and growth stays steady confidence could return.
The coming weeks will be important. New data will guide future moves. Both traditional and digital markets will react. Many will be watching Japan as it plays a key role in the global system.
