The BOJ is reportedly considering raising short-term rates to 0.25%, potentially marking a shift away from eight years of negative interest rates.
The BOJ is reportedly considering an interest rate hike at its two-day policy meeting ending on Wednesday, as per information from Jiji news agency and insights from public broadcaster NHK. The potential raise to about 0.25% from the current 0-0.1% would follow the BOJ's move in March to end eight years of negative interest rates and bond yield control, signaling a gradual shift away from extensive monetary stimulus. Governor Kazuo Ueda said the bank "will hike rates further if it becomes convinced that rising wages will prop up services prices, and keep inflation durably around its 2% target."
Simultaneously, the Federal Reserve is expected to reveal its rate decision on Wednesday afternoon, with market consensus leaning towards an indication of rate reductions in the coming September meeting. CME FedWatch places the odds of a September rate cut at 100%, with a slim possibility of a more substantial cut.
In the UK, the BOE is also due to announce its policy decision on Thursday. Economists and rate markets appear divided, with a 50/50 split on whether the BOE will ease policy for the first time in years. If a rate cut is announced, it is anticipated to be approached with caution, signaling a tentative easing cycle.
With the European Central Bank and the Bank of Canada having already reduced rates, a trend towards looser monetary policy could bode well for Bitcoin. However, the market may have already priced in some of these expectations, as suggested by Bitcoin's performance thus far this year.
As the global economy grapples with inflation and growth concerns, the upcoming decisions by the BOJ, Fed, and BOE will be closely watched for their potential impact on currencies, markets, and broader economic stability. While the BOJ seems to be in a tightening phase, the Fed and BOE may signal the onset of an easing cycle.
