The Need To Suppress Yen Value May Lead To Bitcoin Boost

Exciting things are afoot in Japan, as the national currency is seeing a significant value increase over the past few days. At the same time, Japan is very open towards Bitcoin and other cryptocurrencies right now. While it is not certain this will lead to a future Bitcoin boom in Japan, the stars are aligning themselves for a major shakeup.

Yen Is Dominating All Fiat Currency Markets

In these days of economic turmoil, it is refreshing to see a country dealing with its fiat currency value due to positive reasons. While the Brexit is causing the GBP to plummet even further on a daily basis, Japan is facing a different problem. Their Yen is rapidly gaining in value, which is concerning the government all the same.

Japan is one of the largest economies in the world, and they are dealing with their own problems. But that is not diminishing demand for the Yen by any means. Since the Brexit result came through, the Yen gained 5% in value compared to the US Dollar. Quite a noteworthy increase, even though it is a continuation of previous gains.

During the year 2016, the Japanese Yen has gained over 19% in value, which is quite noteworthy. In fact, the exchange rate against the US Dollar is nearing the 100 yen mark. This is quite a change compared to over 120 yen per dollar back in January of 2016.

Unfortunately, a bullish Yen is not such positive news for Japanese companies and the local economy. Exporting goods produced in Japan become more expensive overseas. Importing goods, on the other hand, becomes a lot cheaper, which may lead to deflation. Unlike most countries, Japan has been suffering from deflation for quite some time now.

It is not unlikely the Bank of Japan will attempt to weaken the Yen in the coming weeks. So far, the institution has been injecting lots of money into its own economy to lower the value of the Yen. However, there is only so many reserves which can be tapped, and experts are concerned Japan will not have much firepower left.

What Does It Mean for Bitcoin?

It is clear one of the only courses of action for the Japanese government is purchasing foreign currency en masse. Bitcoin may present the solution they are looking for, as it can soak up a lot of money that needs to be spent. Moreover, Japan is warming up to the concept of Bitcoin and cryptocurrency as of late, which could spell a BTC price increase in the coming months.

Other currencies need to be strengthened against the Yen, although there are only limited options as to which fiat currencies can be used. The US Dollar is the primary target, albeit it will depend on what the Federal Reserve decides to do. Bitcoin is ripe for the taking, and would solve Bank of Japan’s problems much sooner.

Source: CNN Money

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About JP Buntinx

JP is a freelance copywriter and SEO writer who is passionate about various topics. The majority of his work focuses on Bitcoin, blockchain, and financial technology. He is contributing to major news sites all over the world, including NewsBTC