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Bitcoin Price This Week remains stable above $34,000 mark. As it is following the Bank of Japan’s decision to adjust its yield curve control program. This move is seen as a counteraction to the Federal Reserve’s tightening of liquidity.
Bitcoin Maintains $34K Value
As of the latest data, Bitcoin, the leading cryptocurrency by market value, is trading at $34,300. With only a slight 0.18% decrease in the last 24 hours, according to CoinDesk data.
Bank of Japan’s Yield Curve Change
On Tuesday, the Bank of Japan decided to maintain its short-term policy rate at -0.1%, continuing its policy of negative interest rates. However, the BOJ introduced a notable change by considering the 1% upper limit for the 10-year government bond yield as a “reference” rather than an absolute cap. This adjustment allows for more flexibility in bond yield fluctuations. Thus reduces the pressure on the BOJ to intervene with bond purchases each time the 10-year yield approaches the previous 1% cap.
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Notably, Bitcoin has been known to respond to changes in global fiat liquidity. And the Bank of Japan’s YCC program has been a significant source of liquidity since its inception in 2016.
The BOJ’s decision aligns with a recent Nikkei report. Suggesting that the bank would adopt a more flexible approach, permitting the benchmark yield to surpass 1%. This change in stance is reflected in the strengthening of the U.S. dollar-Japanese yen (USD/JPY) pair, rising from 149.20 to 150. It indicates that traders were anticipating the BOJ to adjust the hard cap to 1.25% or even 1.5%.
Global Market Response To Bitcoin Price This Week
Some market observers interpret the BOJ’s adjustment as a subtle departure from its dovish YCC program. Thus, which encourages caution among traders dealing with liquidity-sensitive assets, including cryptocurrencies.
One key statement from the Bank of Japan is that the 1% upper limit is now a “soft” reference. In addition to, won’t be strictly enforced. Thus, the upward revision of inflation forecasts suggests that this is the most hawkish stance the BOJ has taken in a while. Although, not as hawkish as earlier reports in Nikkei had suggested, according to rates strategist Rishi Mishra.
Furthermore, the IMF has urged the Bank of Japan to consider abandoning the YCC program and prepare for potential tightening or interest rate hikes.
In summary, Bitcoin’s resilience above $34,000 in the face of the BOJ’s shift in its yield curve control program reflects the cryptocurrency’s sensitivity to global economic changes. This adjustment also marks a notable change in the BOJ’s monetary policy, raising questions about its future approach to liquidity and interest rates in Japan.
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Disclaimer:
Please note that this article serves solely for informational purposes. As such, Gold Futures it is not financial advice. We strongly advise readers to conduct thorough research and consult with financial professionals before making any investment decisions.
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