Risk assets, including bitcoin (BTC), remained resilient on Friday during Asian trading hours, despite the Bank of Japan (BOJ) raising its benchmark borrowing rate to the highest level in 17 years and revising inflation forecasts upward.
In its policy statement, the BOJ emphasized that if the positive economic outlook, including wage growth, materializes, it will continue to raise interest rates and adjust its monetary policy accordingly. The statement pointed to improving economic conditions and a commitment to tightening monetary policy further, according to ForexLive.
In response, the Japanese yen gained over 0.6% to 155.12 against the U.S. dollar, reflecting the anti-risk sentiment that followed the rate hike. However, despite the rate increase, risk assets such as bitcoin showed resilience. Bitcoin remained relatively unchanged, trading above $104,000, with no significant volatility observed. Futures tied to the S&P 500 index also traded flat.
The stability in risk assets suggests that market participants are increasingly focusing on potential policy shifts under President Donald Trump’s administration. This contrasts with previous instances, such as the BOJ’s rate hike in late July, which had rattled risk assets, including cryptocurrencies.
Meanwhile, President Trump signed an executive order on Thursday aimed at banning the digital dollar while promoting cryptocurrency and AI innovation in the U.S. Additionally, recent U.S. data showed that the “all tenant rent” index, which influences shelter inflation in the CPI, rose at a slower pace in the last quarter. This has led to growing optimism that the Federal Reserve may reconsider its hawkish stance on interest rates.
