As Bank of Japan offers minimal tweaks to its loose monetary policy, the national currency of country Japanese Yen (JPY) took a drop. With the ongoing US-China trade war going on, other countries like Hong Kong, Japan getting affected, and currencies getting devalued, investors are shifting to Bitcoin and cryptocurrencies as a better and long-term option.
Japanese Yen [JPY] loses against US dollar [USD]
After the Bank of Japan (BOJ) released the statement on Tuesday that it would make its policy framework more flexible for the long term, Yen took a dip. However, for now, the bank only made a few tweaks to its ultra-loose monetary policy.
According to the BOJ Governor, Haruhiko Kuroda the rates would remain “very low” for an extended period of time. As a result, the Yen registered significant losses against the US Dollar on Tuesday.
This in effect has the US dollar rallying against the Yen, breaking the ¥111.50 level. It has been expected that this number would be going a bit higher.
The dovish attitude of Japanese Bank is weighing down on Japanese Yen (JPY). However, some analysts believe that Yen will find support and get stronger from BOJ’s constant struggle to stop the rise in yields.
For now, there doesn’t seem to be any change in the near future but it all depends on the political developments in the country.
US-China trade war can affect Japan’s economy
The ongoing trade war between the US and China is not only affecting both the involved economies but can also affect others as well. Japan is one of the countries that can feel the potential heat from this strife.
There might not be a direct effect of this ongoing trade war on Japan but its economy is likely to suffer an indirect hit. For one, Japan is one of the top trade partners of US. Being deeply involved in the global supply chain, it is to be affected.
The sell-off of global stocks and the threat of punitive duties, as warned by economists, on Japanese cars can further affect the economy and currency of Japan.
Bitcoin & cryptocurrencies offer a better alternative
With the US-China trade war burgeoning, people are looking for safer forms of investment. As the national currencies start devaluing investors are turning towards bitcoin and other cryptocurrencies as they offer a much better option.
As this trade war further affect other global markets like Asia, the citizens of countries like Hong Kong are considering buying cryptocurrencies. According to a recent study of Hong Kong Blockchain Association (HKBA), more than 20 percent of Hong Kong’s citizens would consider buying cryptocurrencies in an economic crisis.
Another market is of Iran where their national currency Rial is plunging to extreme lows resulting in increased interest from investors in cryptos. Rial has touched a new low at 111,500 against USD. This in effect has increased the demand for Bitcoin significantly in the country.
With BOJ’s loose monetary policy still in effect, investors have resigned themselves to more of the same from the bank. Thus, Bitcoin and cryptocurrencies are becoming a favorable option, especially in the long term.