Japan faces pressure to raise interest rates due to inflation as the yen strengthens against the USD and Bitcoin continues to reach new highs thanks to expectations of the Fed cutting rates.
While the US Secretary of the Treasury states that Japan needs to curb inflation by raising interest rates, the Bank of Japan remains cautious. Meanwhile, the USD depreciated, pushing Bitcoin to record highs due to expectations of the Fed's rate cut in September.
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The US Secretary of the Treasury warns that Japan's inflation is high, prompting a push for rate hikes.
The Bank of Japan maintains low interest rates despite persistent inflation pressures.
The USD's sharp decline has led Bitcoin to peak above 124,000 USD, supported by expectations of the Fed cutting rates.
The Bank of Japan (BOJ) maintains interest rates amid inflation.
BOJ Governor Kazuo Ueda believes there is currently no need to raise rates as core inflation remains below the 2% target, despite overall inflation exceeding 3%. The BOJ has kept its key rate at 0.5% in July and has not signaled any upcoming changes.
This viewpoint sharply contrasts with US Treasury Secretary Scott Bessent, who assesses that Japan is 'lagging' and needs to raise interest rates to control inflation. Experts believe that Japan's gradual increase in interest rates helps maintain a weak yen, affecting import costs and driving inflation.
The BOJ is expected to reassess its interest rate policy in September and October, as investors await a potential tightening move. The US government also called on Japan multiple times in June to consider raising interest rates to narrow the gap with the US and ease pressure on the yen.
Remarks by the US Secretary of the Treasury in the context of the global monetary market
US Treasury Secretary Scott Bessent emphasized that Japan faces inflation issues and needs to quickly adjust its interest rate policy to control it. He believes that delaying will undermine economic growth potential and put pressure on the yen exchange rate.
Japan has an inflation problem. They are lagging behind other countries, so they will have to raise interest rates to control inflation.
Scott Bessent, US Secretary of the Treasury, August 2025, Bloomberg interview
This statement caused the yen to appreciate by 0.5% against the USD, reaching 146.72 USD/JPY, leading the Asian currencies to strengthen. However, the Tokyo stock market simultaneously declined, ending a two-day rally.
The USD falls, Bitcoin rises sharply to all-time highs.
The USD has fallen to multi-week lows as investors expect the US Federal Reserve (Fed) to cut rates on September 17. The Fed may reduce rates by up to 0.5 percentage points in the next adjustment.
Bitcoin surged above 124,000 USD, a new record high, thanks to optimism from rate cut predictions and a wave of buying from institutional investors. The decline of the USD has facilitated capital flow into cryptocurrency, stimulating the upward momentum.
However, the economic situation in the US remains volatile due to political pressures demanding the Fed quickly cut rates, creating complexities in monetary policy forecasting.
Scott Bessent supports a 50 basis point Fed rate cut.
The US Secretary of the Treasury expresses the need for a series of rate cuts, starting with a 50 basis point reduction in September. He assesses that current rates should be lower by 150-175 basis points to support economic growth.
As data from the CME FedWatch tool indicates, the probability of a rate cut in September currently exceeds 99%. Goldman Sachs predicts the Fed will cut rates three times this year and twice more in 2026.
I think there will be a series of rate cuts starting with 50 basis points in September. Another reduction of around 150, 175 basis points is needed.
Scott Bessent, US Secretary of the Treasury, August 2025, Bloomberg interview
The US inflation index for July is at 2.7%, lower than expected, reducing concerns about price pressures from the previous administration's tariffs. Investors are now focused on inflation and retail sales data to assess the health of the economy ahead of the next Fed meeting.
Frequently Asked Questions
Why hasn't the BOJ raised interest rates despite high inflation?
Mr. Kazuo Ueda stated that core inflation remains below 2%, so the BOJ is not in a hurry to adjust interest rates to avoid impacting economic growth.
What recommendations does the US Secretary of the Treasury have for Japan?
He suggested that Japan needs to raise interest rates to control inflation and narrow the interest rate gap with the US to improve the yen's value.
What is the impact of the Fed's rate cut on Bitcoin?
Lowering interest rates weakens the USD, facilitating Bitcoin's price rise to all-time highs.
What is the probability that the Fed will cut rates in September?
CME FedWatch data shows that the probability has exceeded 99%, the Fed may reduce by 0.5 basis points in the next meeting.
What is the outlook for Japan's monetary policy in the coming months?
The BOJ will review its interest rate policy in September and October; investors are awaiting a rate hike to control inflation.
Source: https://tintucbitcoin.com/bitcoin-va-yen-nhat-dong-loat-tang-gia/
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