Bank of Japan Considering First Interest Rate Hike in 17 Years, What Does This Mean for Bitcoin and Crypto?
This week will be a big one for crypto and the global market as major central banks from Japan, the US, Australia and others will announce their major decisions regarding interest rate hikes. It is reported that the Bank of Japan (BoJ) will begin its two-day policy meeting on Monday, March 18, and will end the negative interest rate, which will be the central bank’s first interest rate increase in 17 years.
Bank of Japan Ahead of Interest Rate Increase
There is growing speculation that the Bank of Japan (BOJ) may raise its key interest rate on Tuesday after Japan’s largest union group announced the strongest wage deals in more than three decades. This expectation caused the yen to fall slightly against the dollar during Asian trading hours.
In Asian trade, the MSCI Asia Pacific Index rose, driven by gains in Japan, particularly driven by the weakening of the yen. The technology-heavy Nikkei 225 index experienced the biggest rise in the last month. Conversely, U.S. stock futures rose after the S&P 500 fell 0.7% on Friday.
Swap investors have priced in a rate hike of about 28 basis points for this year, according to data compiled by Bloomberg, and the probability of a hike in March is estimated to be around 54%. Goldman Sachs predicts that the BOJ will raise interest rates in response to wage increases and reports that short-term interest rates will be in the range of 0%-0.1%. Goldman Sachs Group Inc. Economist Tomohiro Ota wrote in his note to investors:
What Awaits Bitcoin and Crypto?
This could be another week of big swings in Bitcoin and the broader cryptocurrency market. Last weekend, Bitcoin price dropped below $65,000 but quickly recovered and is currently up 3.27%. $68,620.21 and a market cap of $1.348 trillion.
Analysts at QCP Capital note a significant shift in sentiment as BTC’s heavy selling suggests fear is dissipating among investors who appear eager to seize opportunities to buy the dip. There is also significant interest in long-term September and December BTC calls targeting price levels between $100,000 and $150,000, indicating increased optimism or ‘greed’ in the market.
However, concerns about Ethereum (ETH) are emerging as perpetual funding turns negative and risk reversals continue to trend downward. Despite the continued rise in alternative cryptocurrencies (altcoins), concerns remain regarding the potential for a decline in ETH prices.
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Bhushan is a FinTech enthusiast and has a good ability to understand financial markets. His interest in economics and finance draws his attention to the emerging Blockchain Technology and Cryptocurrency markets. He is in a constant learning process and motivates himself by sharing the knowledge he has acquired. In her spare time, she reads thriller novels and sometimes explores her culinary skills.
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. Neither the author nor the publication accepts any liability for your personal financial loss.
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