Bitcoin witnessed a significant jump, reaching near one-month highs, following the Federal Reserve's recent rate cut. The digital asset rose by 0.8%, standing above $63,200. Meanwhile, the Japanese yen and most major currencies stagnated as Japan observed a public holiday. The Bank of Japan (BOJ) had previously left interest rates unchanged, which played a part in limiting any sharp movements in the yen.
Last week, the U.S. dollar strengthened against the yen after policy meetings in both the United States and Japan. The dollar hit a two-week high at 144.50 yen but stabilized around 144.08 yen as of Monday. The Federal Reserve's 50 basis points rate cut helped maintain the dollar's momentum, whereas the BOJ’s decision to leave interest rates untouched caused the yen’s recent gains to pause. The yen had risen by 1.4% in September, but further hikes are now in question.
With Japan’s markets closed for the Autumnal Equinox Day, trade was driven by expectations of additional Fed rate cuts. The U.S. dollar index slightly increased to 100.8, staying above its one-year low. In addition to Bitcoin's rise, other risk assets and commodity currencies also experienced gains. However, the Australian dollar remained flat around $0.68, despite its recent upward momentum.
According to market analysts, the Fed’s actions have calmed recession fears in the U.S., and many expect further rate cuts throughout the year. Traders have already priced in 75 basis points of cuts by year-end, with potential for more cuts in 2025. As the Fed’s policies continue to shape global markets, other currencies may see similar shifts in the coming months.
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Bitcoin jumps to near one-month highs after the Fed’s recent rate cut, while the yen and other major currencies remain stagnant.
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