The Bank of Japan (BOJ) could quickly raise its benchmark interest rate this year as the yen weakens, eventually pushing it above 2%.
It’s the latest warning from a former Bank of Japan official, Tsutomu Watanabe, an economics professor at the University of Tokyo who left the central bank in 1999, according to Bloomberg.
Currently, the official rate is at 1%, the result of recent hikes, and the yield on benchmark 10-year government bonds is hovering above 2.8%, the highest in at least three decades, according to data source TradingView.
Meanwhile, the Japanese yen continues to fall despite recent rises and hardening Japanese government bond yields. It has depreciated 60% to 162.36 per US dollar since the start of 2021, a significant decline for one of the world’s most traded currencies. Additionally, it has fallen 3% so far this year.
Potential faster interest rate hikes by the BoJ could put a floor under the yen, or even push it higher. The question then becomes whether this will help Bitcoin or work against it.
