Bitcoin reached an all-time high in Asian trading hours Thursday, propelled by shifting monetary policy expectations in Japan and renewed optimism in cryptocurrency markets. The digital asset briefly surpassed $124,500 early in the session before paring gains, eclipsing its previous July milestone. This surge aligns with a sharp appreciation of the yen, which strengthened to its highest level against the dollar since late July following remarks by US Treasury Secretary Scott Bessent urging Japan to address inflation through rate hikes.
Market analysts attribute Bitcoin’s resurgence to supportive US regulatory measures under President Donald Trump, a vocal proponent of digital currencies. Samer Hasn, senior market analyst at XS.com, noted, “The crypto market is benefiting from exceptionally favorable conditions, driven by regulatory clarity and macroeconomic shifts.”
Bessent’s comments to Bloomberg TV signaled growing pressure on Japan’s central bank, which has maintained ultra-loose policies despite inflationary pressures. After discussions with Bank of Japan Governor Kazuo Ueda, Bessent stated the institution was “behind the curve” in tackling inflation, adding, “They’re going to be hiking rates and need to control their inflation problem.” The BoJ began cautiously tightening policy in early 2024 after years of negative rates but held rates steady in July, with analysts anticipating no changes at its September meeting.
The Treasury Secretary’s remarks sparked speculation about US intentions to influence currency dynamics. Hideo Kumano of Dai-Ichi Life Research Institute suggested Bessent’s critique might aim to weaken the dollar, potentially easing pressure on US exports.
Financial markets exhibited mixed reactions regionally. While Tokyo’s Nikkei 225 fell 1.3% during Thursday’s session, it had closed at a record high the previous day following upbeat US inflation data that fueled rate-cut hopes. Hong Kong’s Hang Seng dipped marginally, while Shanghai’s Composite edged up 0.2%. In currency markets, the yen strengthened to 146.43 per dollar, and oil prices saw modest gains, with Brent crude at $65.86 per barrel.
The push for looser monetary policy extended to US domestic priorities, with Trump and Bessent reportedly urging Federal Reserve Chair Jerome Powell to accelerate rate reductions. This stance followed Tuesday’s softer-than-expected inflation figures, which lifted Wall Street benchmarks like the S&P 500 and Nasdaq to fresh highs.
As central banks navigate divergent policy paths, Bitcoin’s rally underscores its evolving role as both a speculative asset and a hedge against currency fluctuations, while traditional markets remain sensitive to interest rate expectations and geopolitical dialogue.
