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Bank of Japan Speculated to Increase Interest Rates
Speculations are circulating about the Bank of Japan potentially raising its interest rates after a 17-year period. This anticipation comes on the heels of the largest union group in Japan putting forth some of the most demanding wage proposals seen in over three decades. Consequently, the yen experienced a slight decline against the dollar.
Central Banks Proposing Interest Rate Hikes
This week is poised to revolve around developments in the cryptocurrency market and the global economy, as major central banks in Japan, the United States, Australia, and other nations reveal their plans for interest rate adjustments. The Bank of Japan (BOJ) is set to commence its two-day policy meeting in this regard.
Rise in MSCI Asia Pacific Index and Nikkei 225 Index
During Asian trading, the MSCI Asia Pacific Index observed gains fueled by a surge in Japan, driven by a weaker yen. However, the Nikkei 225 index experienced a significant upturn. U.S. equity futures also rose, following a 0.7% decline in the S&P 500.
Rate Increase Projections by Swap Traders and Goldman Sachs
Swap traders have priced in around 28 basis points of rate hikes for this year, with a projected increase of approximately 54% in March, as indicated by Bloomberg data. Goldman Sachs predicts that the BOJ will raise rates due to wage growth, with the short-term rate currently at 0%-0.1%. Tomohiro Ota, an Economist at Goldman Sachs, reassured investors that the BOJ does not need additional data to justify a policy shift.
Bitcoin and Cryptocurrency Market Outlook
This week could bring more volatility for Bitcoin and the broader cryptocurrency landscape. Last week, Bitcoin was valued at $65,000 with a swift recovery, now trading at $68,620.21 and boasting a market capitalization of $1.348 trillion.
Analysts’ Observations on Bitcoin and Ethereum
QCP Capital analysts have noted a significant rise in the selling of BTC puts, indicating diminishing investor concerns. Moreover, there is a preference for long-dated September and December BTC calls targeting prices ranging from $100,000 to $150,000.
Concerning Ethereum, there is uncertainty evident as perpetual funding turns negative and risk reversal persists, suggesting a downward bias. Despite the ongoing surge in alternative cryptocurrencies (altcoins), doubts linger regarding a potential decline in the price of ETH.
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