The Bank of Japan (BOJ) could quickly raise its benchmark interest rate this year as the yen plummets, eventually taking it above 2%.
That’s the latest warning from former Bank of Japan official Tsutomu Watanabe, a University of Tokyo economics professor who left the central bank in 1999, according to Bloomberg.
As of now, the official rate is at 1%, a result of recent hikes, and the yield on benchmark 10-year government bonds is around 2.8%, the highest in at least three decades, according to data source TradingView.
Meanwhile, the Japanese yen continues to fall despite recent rallies and tightening Japanese government bond yields. It has depreciated 60% to 162.36 per US dollar since the beginning of 2021, a significant drop for one of the world’s most traded currencies. In addition, it has fallen 3% so far this year.
Potential faster interest rate increases by the BOJ could put a floor on the yen, or potentially lift it. The question then is whether it will help bitcoin. or work against you.
