One of the biggest stories emerging from this month’s Far East is the upcoming launch of a Japanese Yen blockchain -based version, one of the world’s major currencies.
The timing for this development may not be better, since the Bank of Japan (BOJ) is widely expected to raise interest rates as soon as possible, one step likely to increase the appeal of both yen and yen-backed assets.
Earlier this month, CoinDesk reported Japan’s financial service agency (FSA) will likely approve the country’s first yen-denominated stablecoin early in this fall. According to the report, the Tokyo-based firm JPYC plans to register as a money transfer business within the month and dominate a JPY-pegged stablecoin, who is a 1: 1 ratio with the Japanese yen.
Stablecoins are cryptocurrencies that are in an external reference, such as the US dollar, euro, or yen. These tokens play an important role by facilitating capital transfers used for trading, investment, remittance, or international payments, while avoiding volatility is commonly associated with other cryptocurrencies.
JPYC is not alone in chasing a yen-pegged stablecoin. Last week, the financial service company in financial MONEX GROUP announced that It considers the launch of its own JPY Stablecoin aimed at international remittances and corporate settlements. Oki Matsumoto, chairman of the Moneyx Group, told the local media, “The release of stablecoins requires significant infrastructure and capital, but if we do not handle it, we will be left behind.”
Boj rate hike
Both top banks and merchants are expected to have the BOJ hike rates in the coming months, while the US Federal Reserve is seen doing the opposite.
Hiroshi Nakzawa, head of the Hokuhoku Financial Group, one of the largest banks in Japan’s region by possessions, said this weekend that the week Boj can raise interest rates On either October or December, thinking “things are going well.”
Shares to the Hokuhoku Financial Group are the best performance of banking stocks this year, with prices rallying 90% to raise Topix Banks Index, with 70 lenders.
Nakzawa’s views aligned with the broader agreed market over upcoming rate increases. According to Bloomberg Economics, Tokyo’s released inflation report is likely to boost the BOJ’s view that consumer price momentum remains strong, on the track to reach its 2% target. The Team forecasts A 25 basic rate of increase in BoJ’s October meeting.
The expected rate increase may prompt investors to transfer funds to JPPs supported by stablecoins. Remember that the 2022 Fed rate hike cycle was seen as strengthening the demand for USD-Pegged Stablecoins, although the appeal of Stablecoins was temporarily dented by the Terra crash in May 2022.
The BOJ raised rates twice in recent years, from 0.1% to 0.25% in July last year and then another 25 basic point increase in January. Since then, the central bank has maintained stable rates.
Japanese yield rises, drops of BTC/JPY
Yields to the longer duration of Japanese government bonds (JGBS)The third largest government debt market after the US and China, has climbed the multi-decades high, reflects the fiscal concerns and the strong hope of an imminent BOJ rate increase.
For example, JGB’s 30-year harvest recently advanced to a record of more than 3.2%, while the 10-year yield reached 1.64%, levels that have not been seen since 2008, according to TradingView data.
Adding Yen’s appeal is the narrow gap between us and the Japanese 10-year yield, which has tightened 2.62%, the lowest since August 2022. Since the USD/JPY exchange rate is Close tracks The difference of this yield, a review of Macromicro’s regression suggests that the pair should trade around 144.43, compared to the Friday level of approximately 147.00.
In other words, regression analysis points to yen appreciation.
Yen strengthening and expected rate increases also indicate downside potential for BTC/JPY. The cryptocurrency pair listed in Bitflyer has dropped 8% this month, pressing the lowest level since July 9. This recent sale has triggered a classic double top bearish reversal pattern on the daily chart.
Analysis of technical use of the measured transfer method suggests double top damage can lead to prices that fall to about 14,922,907 JPY. This target is calculated by reducing the height between the two peaks and the temporary trough from the low trough, indicating an additional risk for bitcoin priced at the yen.
