Bitcoin hovered around $63,900 on Friday, showing little change after the Bank of Japan (BOJ) maintained its benchmark interest rate at 1%. Despite Governor Kazuo Ueda's attempts to signal a hawkish stance, markets largely ignored the shift, keeping the yen carry trade intact.
BOJ’s Decision and Market Impact
The BOJ’s move surprised few as traders had already factored in a probable rate hike in October. During his press conference, Ueda highlighted expectations that inflation will exceed 2% later this fiscal year, driven by growing artificial intelligence (AI) demand and a persistently weak yen. These factors have been influencing the macroeconomic environment that also affects cryptocurrencies.
The yen initially reacted but quickly reversed course, with the dollar-yen exchange rate returning to previous levels. The soft yen continues to support the carry trade, where investors borrow in low-yielding yen to fund riskier assets, including crypto.
Crypto Market Reaction
Bitcoin’s stability reflects the carry trade’s influence and the broader AI investment cycle which has closely tracked bitcoin’s movements this month. While bitcoin stayed near $64,000, ether remained around $1,885. Binance Coin (BNB) stood out, climbing 3.5% on the day and 4.4% over the week to about $591, according to CoinDesk data.
