Bitcoin Remains Resilient as Bank of Japan Hikes Rates to 17-Year High

Bitcoin (BTC) maintained its stability during Friday’s Asian trading session following the Bank of Japan (BOJ) decision to raise its benchmark borrowing rate to the highest level in 17 years, alongside an upward revision of its inflation forecasts.

In the official policy statement, the BOJ suggested that it would continue to raise the interest rate and adjust its monetary policy stance if the positive outlook for wages materializes. “If the outlook presented in the January Outlook Report materializes, the Bank will continue to raise the policy interest rate and adjust the degree of monetary accommodation,” the statement noted, according to ForexLive.

The Japanese yen, traditionally seen as an anti-risk asset, strengthened by over 0.6%, reaching 155.12 against the U.S. dollar in response to the BOJ’s decision. Despite this, risk assets, including Bitcoin, displayed resilience, holding steady above $104,000. Additionally, S&P 500 futures remained largely flat, showing no significant reaction to the rate hike.

This resilience in risk assets highlights the growing focus on potential policy changes under the leadership of President Donald Trump. In contrast, the BOJ’s previous rate hike in July had rattled risk assets, including cryptocurrencies.

On Thursday, President Trump signed an executive order banning the digital dollar while promoting cryptocurrency and AI innovation within the U.S. The latest U.S. data also showed a slower-than-expected rise in the all tenant rent index, which has a direct impact on shelter inflation in the CPI, raising hopes that the Federal Reserve may reconsider its aggressive rate hike plans moving forward.