Opinion: Japan's higher-than-expected core inflation triggers interest rate hike discussion, which may pose a threat to the crypto market

Odaily Planet Daily News, Japan's latest core inflation data is higher than market expectations, triggering market discussions about the Bank of Japan (BOJ)'s possible interest rate hike, which may affect risky assets including cryptocurrencies. Data showed that Japan's core CPI rose 3% year-on-year in February, down from 3.2% in January, but still higher than the market's expected 2.9%. At the same time, Japan's overall CPI fell from 4% to 3.7%, but still far exceeded the 2% inflation target set by the BOJ. Since November 2024, Japan's inflation rate has continued to be higher than that of the United States, and is currently nearly 100 basis points higher, the largest gap since 2015. Combined with the pressure of salary increases brought about by the "Shunto" salary negotiations, market expectations for BOJ's interest rate hikes have increased. Expectations of interest rate hikes have pushed up the yen, but if the yen strengthens significantly, it may trigger market risk aversion, thereby putting pressure on risky assets such as Bitcoin. As of press time, the USD/JPY exchange rate is 149.22, having rebounded nearly 300 basis points since March 11, indicating a short-term weakening of the yen. However, the yield spread between the US and Japanese 10-year government bonds has narrowed, with the Japanese 10-year government bond yield remaining above 1.5% and the 30-year government bond yield exceeding 2.5%, both at a multi-decade high, which may support the strengthening of the yen. The market is paying attention to the future policy direction of the BOJ and its impact on global financial markets. (CoinDesk)