BTC Rises as BOJ Delivers Hawkish Rate Hike
June 16, 2024 — Bitcoin (BTC) reversed early losses during the Asian session following the Bank of Japan's (BOJ) decision to raise interest rates.
The BOJ raised its policy rate by 25 basis points to 1%, the highest level since 1995.
The move, announced at approximately 3:19 UTC, was in line with market expectations. However, the central bank included hawkish signals indicating the potential for further tightening.
Why the BOJ raised rates
The BOJ cited upside risks to inflation, noting that higher oil prices are being passed through to consumer goods faster than expected due to ongoing geopolitical tensions. Wholesale prices rose more than 6% year-over-year in May—the fastest pace in three years.
While headline inflation stood at 1.4% in April—still below the BOJ's 2% target—the central bank signaled readiness to act again if price pressures persist.
Market reaction
Following the announcement, BTC climbed from approximately $65,600 to $66,000.
Meanwhile, the Japanese yen weakened slightly, moving from 130 per US dollar to 130.35 per US dollar.