Nikkei Jumps 2.5% As BOJ Hints to Pause Rate Hike, Crypto Market Rally Ahead?
In another stimulus to the global equity market, the Bank of Japan’s governor Shinichi Uchida said that the central bank might consider pausing its interest rate hike decision from last week if they see major instability in the markets. The Nikkei 225 Index surged by another 2.5% on Wednesday shooting past 35,000 levels. Besides, the crypto market is also showing strength with the Bitcoin price up by 2% and trading closer to $57,000 as of press time.
Nikkei Surge As BOJ Fuels Optimism
With today’s surge past 35,000, Nikkei has recovered almost all of the losses from the black Monday’s market crash on August 5. As the Bank of Japan announced its 25 bps rate hike last week, the unwinding of Yen carry trades sent shockwaves across the global market bringing the markets on the brink of triggering a US recession.
BOJ governor Shinichi Uchida’s intervention comes at the right time bringing some reassurance to the markets. This flexible approach from the BOJ has helped to curb market uncertainty with traders evaluating whether the recent global sell-off was an overreaction to the weak US economic data. Charu Chanana, head of currency strategy at Saxo Markets said:
“Uchida-san’s comments can bring some stability to the Japanese equity market for now, but it cannot take the focus away from US economic data and recession concerns. Putting in fresh carry trades remains tough in this environment of higher volatility and nervousness about the US economy.”
Also Read: Donald Trump’s Son Hints Big Announcement On Crypto and DeFi
Crypto Market Recovery Further?
On Tuesday, the crypto market recovered sharply with Bitcoin and other altcoins bouncing back more than 10% from the Monday lows. The altcoins market saw an even stronger recovery with ETH, SOL, etc gaining by more than 15%.
As of press time, the Bitcoin is up by 3% shooting to $57,250 levels. Market analysts noted that the Bitcoin price rally can extend to above $60,000 as global stock markets recover. CryptoQuant analyst Ki Young Ju writes that as long as BTC sustains above $45,000, it can still rally to a new all-time high within a year’s time.
As long as the #Bitcoin price stays above $45K, it could break its all-time high again within a year, imo.
Some indicators are showing bearish signals. However, they could still recover with a rebound, so we need to watch if it stays at this level for a week or two.
If it… https://t.co/FnqafcQcjp pic.twitter.com/fJiM2btQeF
— Ki Young Ju (@ki_young_ju) August 6, 2024
On the other hand, the Ethereum ETFs have seen strong inflows led by BlackRock’s ETHA. This shows that the institutional interest in ETH persists despite the recent crash.
Also Read: Bitwise Bitcoin ETF: $40B Wealth Manager Taps BITB
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