Bitcoin News Today: Bitcoin Holds Above $118,000 as BOJ and Fed Pause Rate Hikes Amid Rising Inflation Forecasts

Bitcoin has remained stable above $118,000 amid a broader shift in global monetary policy and evolving economic signals. The Bank of Japan (BOJ) and the U.S. Federal Reserve have both paused rate hikes, a decision interpreted by market participants as a signal of cautious optimism amid revised inflation forecasts and easing trade tensions between the two nations [1]. The BOJ maintained its benchmark interest rate at 0.5% during its latest meeting and raised its 2025 inflation forecast to 2.7%, signaling a growing awareness of inflationary pressures and a potential pivot toward tightening monetary policy later this year [1]. Analysts from Mizuho Securities and Invesco speculate that a rate hike could occur as early as October 2025, reflecting a shift in the central bank’s stance toward a more hawkish approach [1].

Simultaneously, the U.S. Federal Reserve’s decision to pause rate hikes underscores concerns about inflation driven by tariffs and global trade uncertainties. The Fed’s cautious approach has contributed to a broader atmosphere of economic uncertainty, which has supported Bitcoin’s market resilience [1]. The cryptocurrency’s ability to hold above $118,000 is being attributed to a combination of macroeconomic factors, including investor skepticism toward traditional fiat currencies amid rising inflation expectations [1].

The easing of U.S.-Japan trade tensions has further bolstered market sentiment. This development is viewed as a critical factor in reducing economic uncertainty and potentially offering the BOJ more flexibility in adjusting its monetary policy. Khoon Goh of ANZ has noted that the reduction in trade-related risks removes a significant barrier to policy tightening, while strategists like Masato Koike now consider the 0.5% rate as non-terminal, suggesting that future rate hikes remain on the table [1].

Experts from major financial institutions have highlighted the evolving dynamics of the monetary landscape. Shoki Omori of Mizuho Securities described the BOJ’s strategy as cautious but forward-looking, while David Chao of Invesco emphasized the rising likelihood of a near-term rate hike. Meanwhile, Hirofumi of SMBC argued that current inflation levels already justify a shift toward tighter monetary conditions [1]. These perspectives reflect a broader consensus among analysts that inflationary pressures are intensifying and that central banks may soon need to respond accordingly.

Bitcoin’s resilience in this environment is being attributed to its role as a hedge against fiat currency devaluation and macroeconomic instability. The cryptocurrency benefits from a climate of uncertainty, where investors are increasingly seeking decentralized assets to protect their portfolios against traditional financial risks [1]. This dynamic is likely to continue as both the BOJ and the U.S. Federal Reserve monitor inflation developments and assess their next steps.

The current market conditions suggest that Bitcoin will remain a key asset class for investors navigating a shifting global economy. With inflation forecasts rising and trade tensions easing, the cryptocurrency’s price trajectory will be closely watched as central banks recalibrate their policies in the coming months.

Sources: [1] https://en.coinotag.com/bitcoin-holds-above-118k-amid-central-bank-rate-pause-and-inflation-forecast-revisions/