Bitcoin (BTC $88,754.76) and the Japanese yen, which have closely tracked each other recently, held steady on Friday following Japan’s first slowdown in inflation in four months and the Bank of Japan’s (BOJ) decision to keep interest rates unchanged.

Japan’s headline consumer price index (CPI) rose 2.1% year-on-year in December, down from 2.9% in November, while core inflation, which excludes fresh food, eased to 2.4% from 3%. Core-core inflation, excluding both food and energy, remained elevated at 2.9%, signaling persistent underlying price pressures. Analysts at ING noted that slowing headline inflation may prompt caution, but steady core-core readings could support future policy normalization.

The BOJ maintained its benchmark rate at 0.75% in a near-unanimous vote and raised growth and inflation forecasts for fiscal 2025 and 2026, citing continued fiscal support.

Bitcoin stayed near $90,000, while the yen dipped slightly to 158.70 per U.S. dollar. Analysts warned that yen weakness could weigh on Bitcoin, given the two assets’ 90-day correlation of 0.84.

The 10-year Japanese government bond yield rose 3 basis points to 1.12%, reflecting ongoing fiscal concerns and expectations for future BOJ tightening. Earlier in the week, rising Japanese yields boosted global borrowing costs, pressuring risk assets and contributing to Bitcoin’s midweek drop below $88,000 before stabilizing.