BOJ lifts policy rate to 1.25%; Bitcoin stays above $77,000

CoinDesk reports that the Bank of Japan raised its policy rate by 25 basis points to 1.25% after its Sept. 17–18 policy meeting. The move marks the second rate increase in three months and takes borrowing costs to their highest level since 1995. The decision passed by a 7–2 vote. Two board members opposed the hike, tempering expectations that policy tightening could accelerate. Japan continues to grapple with price pressures. Core consumer inflation rose 1.7% year over year in August, with energy costs and a weaker yen still pushing prices higher. The yen failed to strengthen after the announcement. USD/JPY climbed to as high as 157.145, implying the yen weakened by up to 0.8% on the day. The BOJ's move follows a 25-basis-point increase by the Federal Reserve and an earlier rate hike by the European Central Bank this month. Even as several major central banks maintain a restrictive stance, the BOJ decision did not spark notable selling in assets linked to yen carry trades. Bitcoin remained firm above $77,000, with total crypto market capitalization near $2.73 trillion. On the flows side, Bitcoin spot ETFs posted about $159 million in net inflows on Sept. 17, offering support ahead of the BOJ decision. Markets now turn to comments from BOJ Governor Kazuo Ueda for clues on whether the next phase of rate increases will proceed gradually.