The Bank of Japan (BOJ) may raise its benchmark rate quickly this year as the yen falls, eventually pushing it above 2%.
That’s the latest warning from 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.
Right now, the official rate is at 1%, a result of recent increases, and the benchmark 10-year Treasury yield is hovering above 2.8%, the highest in at least three decades, according to data source TradingView.
Meanwhile, the Japanese yen continues to slide despite recent gains and hardened Japanese government bond yields. It has fallen by 60% to 162.36 per US dollar since the beginning of 2021, a big drop for one of the most traded currencies in the world. Also, it’s down 3% so far this year.
Faster potential rate hikes from the BOJ could put a floor under the yen or potentially lift it higher. The question then is whether it will help bitcoin or work against it.
