Posted 10/31/2023, 5:55:00 AM
Bitcoin Rallies as Bank of Japan Eases Grip on Yield Curve Control
- Bitcoin trades above $34K after Bank of Japan softens grip on yield curve control program
- BOJ keeps short-term rate at -0.1% but says 10-year bond yield 1% cap now a "reference" not hard limit
- Move allows more yield fluctuations, relieves pressure on BOJ to buy bonds when yield nears 1%
- Bitcoin tracks global fiat liquidity, BOJ's YCC a significant liquidity source since 2016
- BOJ move consistent with Nikkei report that bank would take more flexible stance on yields
- USD/JPY bounced back, sign traders expected BOJ to move cap higher to 1.25% or 1.5%
- Some say BOJ tweak is stealth tightening, so liquidity-sensitive assets like crypto need caution
- Rates strategist Most hawkish BOJ move in a while, just not as hawkish as leaks suggested
- IMF has urged BOJ to abandon YCC, prepare for tightening and eventual rate hikes