Bank of Japan (BOJ) Governor Kazuo Ueda said in a statement that the central bank will raise interest rates further if the economy and prices perform as expected, Bloomberg reported.
The interest rate hike at the beginning of August caused a massive collapse in risky assets, including Bitcoin and cryptocurrencies, causing yen carry transactions to decline.
Following BOJ’s Ueda’s comments, the question of whether another Bitcoin price crash due to Japanese yen carry transactions is imminent has been raised, with experts noting that if interest rate differentials between the US and Japan remain high, more investors will enter Yen carry transactions. This triggers a sell-off in the broader crypto market, posing the risk of another Black Monday-type Bitcoin price crash.
However, experts believe that the BOJ's interest rate hike decision will have limited impact thanks to the interest rate cut from the FED, and that the FED's September rate cuts will narrow the interest rate gap between the US and Japan, thus preventing a major collapse.
Bitcoin (BTC) has struggled to break above $60,000 amid market uncertainty, but has since given back gains today, with the price hovering around $58,0000 at press time.
*This is not investment advice.
