The Federal Reserve (Fed) and the Bank of Japan (BoJ) both hand down interest rate decisions next week, two days apart. Bitcoin (BTC) enters the pair of events near $64,000.
Markets expect a hold in both cases. Doubt is concentrated in Washington, where about a third of pricing still favors a hike.
Fed Hike Odds Climbed as Oil Rebounded
The Fed has held its target range at 3.5% to 3.75% since December 2025. A hold on Wednesday would be the fifth in a row.
Pricing still moved quickly this month. CME FedWatch put the odds of a July hike near 38% on July 23. That figure stood at 12% a week earlier.
Oil drove that move. Brent crude settled above $100 a barrel on July 23, its first close above that level since May.
Odds have since eased to 34.2%. A hold, therefore, remains the majority outcome in futures pricing.
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June inflation data had pointed the other way. Consumer prices fell 0.4% on the month, cutting the annual rate to 3.5% from 4.2%.
However, that relief may not last. Renewed hostilities and the oil surge could lift July inflation. That reading lands on August 12.
The July meeting includes no Summary of Economic Projections. That leaves the statement and the press conference as the only output from the meeting.
The Yen Is the Larger Variable for Bitcoin
Meanwhile, Nikkei reported that the Bank of Japan will hold its policy rate at 1% on July 31. Still, the currency is the pressure point. The yen slid past 163 per dollar last week, its weakest level in four decades.
Officials have grown vocal. Finance Minister Satsuki Katayama said the government was ready to step into the market if needed.
“Our stance has not changed at all. If there is a need for it, we will take decisive action appropriately at any time,” Katayama told reporters.
A hold on Friday sends no clear directional signal to Bitcoin. Rates stay put, and the cost of yen funding remains unchanged.
The rate risk, therefore, sits later in the calendar. Some 86% of 87 economists polled by Reuters expect a hike to 1.25% by the end of December.
Of those naming a month, 53% chose December and 35% picked October. Kazutaka Maeda of Meiji Yasuda Research Institute, who forecasts an October move, sees room for a faster sequence.
“The pace of rate hikes, which until now has been roughly once every six months, may accelerate somewhat due to the need to counter inflationary and yen-selling pressure,” he said.
This matters because of how Japanese policy affects crypto. The link runs through borrowing costs. Investors borrow yen cheaply and buy higher-yielding assets abroad, including crypto.
A stronger yen breaks that trade. The loan costs more to repay, margin calls follow, and traders sell whatever is liquid first.
Bitcoin sits at that end of the book. It also trades around the clock, so it absorbs the selling before equities open.
“Any hint of aggressive rate hikes or intervention from the BOJ could pump the yen, causing a massive carry trade unwind. Remember August 2024? The next unwind could be even more brutal,” Crypto Rover said.
That is why Friday matters more than the headline rate. The signal sits in the Outlook Report and in how hard Ueda pushes back on the currency.
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