The Bank of Japan kept its benchmark interest rate unchanged at 1% on July 31, but one analyst warns of growing liquidity risk building beneath global markets. Japan has relied on near-zero interest rates for more than three decades, allowing the country to accumulate one of the largest public debt loads of any developed economy, with the Bank of Japan becoming the biggest buyer of its own bonds. Wage growth exceeding 5%, a level not seen since before Japan’s deflationary period began, weakens the case for maintaining loose monetary policy. Analyst EGRAG CRYPTO fears that a rapid unwind of cheap yen conditions could force investors to sell foreign assets to repay yen-denominated loans, triggering a chain reaction that could extend beyond Japan. Bitcoin traded around $64,000 following the rate decision, up nearly 9% over the past month but down approximately 18% over three months.
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