The leading cryptocurrency held steady as the Bank of Japan (BOJ) voted unanimously to keep interest rates at 0.5%, revising its 2025 inflation forecast upward to 2.7%. The move comes just a day after the U.S. Federal Reserve also decided to hold rates steady, with Chair Jerome Powell warning that tariff-driven inflation linked to President Trump’s trade measures is still in its early stages.
While the BOJ didn’t adjust rates this time, analysts say its tone was notably hawkish. The central bank now expects inflation to ease to 1.8% in 2026 and tick up to 2% in 2027—both slightly higher than its earlier projections. This shift in outlook is leading many to believe a rate hike could arrive as early as October.
Mizuho Securities’ Shoki Omori anticipated today’s inflation revision and said the BOJ’s strategy reflects a wait-and-see stance, while Invesco’s David Chao argued the forecast boost increases the likelihood of a near-term hike. SMBC’s Hirofumi Suzuki went further, suggesting a hike is already justified given the upward shift in inflation.
One development that may reduce headwinds is the recent easing of trade tensions between Japan and the United States. Khoon Goh of ANZ noted that the trade deal removes a layer of uncertainty, potentially giving the BOJ more flexibility to tighten policy.
Meanwhile, some strategists—including Masato Koike of Sompo Institute Plus—who had previously seen 0.5% as the terminal rate, are now open to a potential policy shift later this year.
Despite the hawkish signals from Tokyo, Bitcoin’s resilience above $118,000 signals robust market confidence. The crypto asset appears to be unfazed by central bank caution, possibly benefiting from investor skepticism toward fiat stability amid rising inflation projections worldwide.
As both the BOJ and Fed brace for potential inflation shocks tied to shifting global trade dynamics, traders continue to monitor how these macroeconomic currents may steer Bitcoin’s next big move.
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