Bank of Japan Considers First Rate Hike in 17 Years

Bank of Japan’s policy meeting expected to end the 17-year negative interest rate has sparked speculation of a rate hike.

As a result of the announcements that leading central banks from Japan, the United States, Australia and other countries are making regarding their critical decisions regarding interest rate hikes, this week will be a significant week for cryptocurrency and the global market.

Bank of Japan’s policy meeting

Monday, March 18, will mark the beginning of the two-day policy meeting that the Bank of Japan (BoJ) will have. It is also expected that the BoJ will stop its negative interest rate, which would be the first rate hike the central bank has implemented in 17 years.

As a result of the largest labor union in Japan announcing the most robust salary agreements in more than three decades, there is rising speculation that the Bank of Japan (BOJ) may decide to raise its primary interest rate on Tuesday.

As a result of this anticipation, the yen’s value over the dollar has experienced a slight decrease during the trading hours in Asia. The MSCI Asia Pacific Index saw gains during trading in Asia. A rebound in Japan, primarily due to a weaker yen, supported these gains.

The Nikkei 225 index, which is heavily weighted toward technology, recorded its most significant and substantial increase in a month. Additionally, after the S&P 500 fell 0.7% on Friday, US equities futures rose.

Based on the information from Bloomberg, swaps traders have predicted that there will be roughly 28 basis points worth of rate hikes this year.

The probability of a rate hike occurring in March is approximately 54%. Goldman Sachs believes that the Bank of Japan will choose to boost interest rates in reaction to wage rises, and some reports predict the short-term rate will be somewhere in the range of 0% to 0.1%.

Tomohiro Ota, an economist at Goldman Sachs Group Inc., warned in a letter to investors that this week could be another week of significant volatility in Bitcoin and the cryptocurrency market as a whole.

“These developments imply that the BOJ probably no longer needs more data for the policy change, nor to wait to justify the policy change with the quarterly Economic Outlook report in April”.

Bitcoin dropped below $65,000 throughout the previous weekend; however, it rapidly recovered and is currently trading for $68,620.21, with a market size of $1.348 trillion.

This represents a 3.27% increase from its previous price. Analysts at QCP Capital have noted a significant shift in sentiment, interpreting the large selling of Bitcoin puts as a sign of investors’ waning concern.

These investors are anxious to take advantage of the opportunity to buy the decline. In addition, there is a significant interest in long-dated Bitcoin calls with dates in September and December, intending to reach price levels ranging from 100,000 to 150,000 USD.

This indicates a growing sense of optimism or ‘greed’ in the market. On the other hand, because everlasting funding is turning negative and risk reversals are continuing to demonstrate a bearish skew, Ethereum (ETH) is becoming a source of some anxiety.

Apprehension continues to exist around the possibility of a decline in the price of Ethereum (ETH), although alternative cryptocurrencies (altcoins) are now experiencing a surge.