Daily Market Update: Stock Futures Climb While Bitcoin Stays Flat After BOJ Rate Decision

TLDR

• Japan’s headline inflation slowed to 2.1% in December from 2.9% in November, but core-core inflation stayed high at 2.9%
• Bank of Japan held interest rates steady at 0.75% and raised growth and inflation forecasts for 2025 and 2026
• Bitcoin traded near $90,000 with minimal movement, while the Japanese yen weakened slightly to 158.70 per dollar
• The 10-year Japanese government bond yield rose 3 basis points to 1.12% on expectations of future rate hikes
• US stock futures climbed Friday morning with S&P 500 and Nasdaq 100 futures up 0.3% after two days of gains

The Bank of Japan kept its benchmark interest rate unchanged at 0.75% on Friday. The decision came hours after Japan reported its first inflation slowdown in four months.

Bitcoin showed little reaction to the news. The cryptocurrency traded near $90,000 with minimal price movement throughout the day.

Japan’s headline consumer price index fell to 2.1% in December. This marked a drop from November’s 2.9% reading, according to the Ministry of Internal Affairs and Communications.

Core inflation, which excludes fresh food prices, also declined. It eased to 2.4% from 3% in the previous month.

However, the core-core inflation measure remained elevated. This metric, which strips out both fresh food and energy prices, only edged down slightly to 2.9% from 3%.

Analysts at ING noted that underlying price pressures remain persistent. They said monthly fluctuations in energy subsidy programs mask the true inflation picture.

The central bank raised its growth and inflation forecasts for fiscal years 2025 and 2026. The BOJ cited support from expansionary fiscal policy as the reason for the upward revisions.

Market Response to BOJ Decision

The Japanese yen weakened by just over 0.20% following the announcement. It traded at 158.70 per US dollar.

Bitcoin and the yen have recently shown a strong positive correlation. The 90-day correlation coefficient between the two assets stood at 0.84 at the time of the BOJ decision.

The 10-year Japanese government bond yield rose 3 basis points to 1.12%. Traders expect continued BOJ rate hikes in coming months based on persistent underlying inflation.

Japanese yields had surged to multi-decade highs earlier in the week. Concerns about tax cuts promised by political parties ahead of the February election drove the increase.

The rise in Japanese borrowing costs affected global markets. US yields also climbed, creating headwinds for risk assets.

Bitcoin and US Stock Performance

Bitcoin fell over 4.5% to $88,000 on Tuesday as global yields rose. The cryptocurrency has since recovered slightly but remained largely flat over the past 24 hours.

US stock futures climbed on Friday morning. S&P 500 and Nasdaq 100 futures gained around 0.3%.

Dow Jones Industrial Average futures rose 0.1%. The gains came after two straight sessions of positive movement sparked by cooling geopolitical tensions.

Intel shares fell more than 10% in extended trading. The semiconductor company issued a weaker-than-expected outlook for the first quarter.

Gold prices pushed over $4,900 for the first time on record. Goldman Sachs raised its gold price forecast to $5,400 by the end of 2026.

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