Arthur Hayes Highlights the Bank of Japan’s Upcoming June Meeting as a Key Macro Trigger That Could Push Bitcoin Higher if Quantitative Easing Returns and Tightening Is Delayed

Inflation is still lower than the central bank’s target, a situation that keeps weakening the Japanese yen. Bloomberg mentions that Ueda pointed out in his summary that the inflation target is still quite far from being met. Because of its careful wording, people are more convinced that the BOJ will not consider raising interest rates for some time.

As a result of the position, the Japanese yen continues to be undervalued because Japan is still using ultra-loose monetary policies. The decision not to increase interest rates as soon as possible is viewed by many as helping Japan’s weak economic climate. Still, a weak yen is leading to changes in global financial markets, mainly with prices of assets and the trades that rely on currencies.

Ueda’s approach lessens the possibility of quick increases in interest rates. Unlike many other countries, the BOJ is still adopting a cautious strategy as most central banks get more aggressive with higher interest rates. Therefore, any changes in monetary policy have a big impact on Japanese assets and the yen.

Market Reactions and Expectations Ahead of the June BOJ Meeting

The upcoming June meeting of the BOJ is being closely monitored by everyone in the financial sector. The central bank is expected to keep its rates as they are since analysts consider the economic situation very uncertain. Arthur Hayes, co-founder of BitMEX, has predicted that if Japan’s central bank decides to slow QT and bring back certain kinds of QE, the market value of cryptocurrencies and equities could rise rapidly.

According to him, the bank’s dovish attitude, along with limited QE measures, could prompt investors to take on greater risks. Because of this, we might see investors move their funds into high-risk bitcoin because they want to make higher returns with low interest rates. Hayes said in a tweet, “LFG $BTC,” revealing he expects bitcoin to go up if the BOJ becomes even more generous with its financial actions.

The chances of this happening are already reflected in markets, as there is greater trading in FX futures, crypto spot trading, and Japanese equities. Analysts expect that prolonged measures from the Bank of Japan could encourage investors to put their capital in risky assets worldwide. Nevertheless, it’s unclear if the BOJ will act enough, because Japan faces challenges from inflation and the decline of its currency.

Yen Vulnerability Raises Questions About Japan’s Economic Strategy

Japan’s approach to monetary policy is being talked about positively and negatively by different groups. On the other hand, having low interest rates helps domestic companies and households, who have their wages and incomes rise very slowly. Just the same, if the yen weakens, the cost of importing goods goes up, and inflation for foreign items affects people living in Japan.

By speaking about a moderate pace of rate hikes, Ueda shows that the Bank of Japan will probably act slowly on tightening monetary policy, continuing well into 2026. Since the Federal Reserve and European Central Bank are increasing or keeping rates the same, and Japan is not, speculative carry trades are now a possibility for investors.

Even though the technique ensures immediate cash flow, it produces long-term problems. Under these circumstances, those in charge may be urged by people to rethink their approach. Still today, the BOJ is focusing more on ensuring economic stability than following its previous policy of inflation targeting.