Bitcoin climbs to $66,000 despite the Bank of Japan’s 25 basis point hike, as dovish bond-buying signals offset tightening concerns.
The Bank of Japan raised its key interest rate by 25 basis points to 1%, the highest level since 1995, citing inflation risks and potential further tightening. The move matched market expectations but included a surprise pause in bond tapering, fixing monthly JGB purchases at 2 trillion yen to stabilize long-term yields.
Japan’s inflation has accelerated, with wholesale prices rising over 6% year-over-year in May, the fastest pace in three years. Headline inflation reached 1.4%, driven by higher oil prices and geopolitical tensions, prompting the BOJ to signal readiness for additional hikes if price pressures persist.
Bitcoin rose from $65,600 to $66,000 following the decision, as traders focused on the BOJ’s dovish stance on bond purchases rather than the rate hike. The central bank’s efforts to cap yields appeared to ease concerns over tighter financial conditions.