The Japanese yen declined in Asian trading on Friday against a basket of major and secondary currencies, extending its losses for a second consecutive day against the US dollar and approaching its lowest level in a week. The currency is on track for its biggest weekly loss this year, amid weakening expectations for a Japanese interest rate hike before next September.

The reduced likelihood of near-term monetary tightening in Japan is attributed to the expected expansionary fiscal policies of Prime Minister Sanae Takaichi, in addition to easing inflationary pressures on policymakers at the Bank of Japan.

Price Overview

The Japanese yen exchange rate today: the dollar rose against the yen by 0.2% to 155.31 yen, up from the opening level of 154.99 yen, while recording a session low of 154.87 yen.

The yen ended Thursday’s session down 0.15% against the dollar, marking its second consecutive daily loss, and recorded a one-week low of 155.34 yen, driven by strong Japanese investment spending in the United States.

Weekly trading

Over the course of this week’s trading, which officially concludes at today’s settlement, the Japanese yen has fallen by around 1.75% against the US dollar so far, putting it on track for its largest weekly loss this year, specifically since July 2025.

Core inflation

Data released today in Tokyo showed that Japan’s core consumer price index rose by 2.0% in January, the slowest pace since January 2024, in line with market expectations for a 2.0% increase, compared with a 2.4% rise in December.

These figures clearly indicate continued easing of inflationary pressures on policymakers at the Bank of Japan, reducing the chances of a Japanese interest rate hike during the first half of this year.

Views and analysis

Abhijit Surya, Chief Economist for Asia-Pacific at Capital Economics, said today’s data is unlikely to create a sense of urgency at the Bank of Japan to resume its monetary tightening cycle, particularly amid weak economic activity in the last quarter.

Surya added that if recent weakness proves temporary, and wage growth improves while underlying price pressures remain relatively firm, there is still a strong case for the bank to raise interest rates again in June.

Japanese interest rates

Following the above data, market pricing for a quarter-point interest rate hike by the Bank of Japan at its March meeting dropped from 10% to 3%.

Pricing for a quarter-point rate hike at the April meeting also declined from 50% to 30%.

According to the latest Reuters poll, the Bank of Japan may raise interest rates to 1% in September.

Investors are now awaiting further data on inflation, unemployment, and wage levels in Japan to reassess those expectations.

Some of you may remember devouring paperback science-fiction novels with bold futuristic covers and imagining the worlds created by Isaac Asimov, Arthur C. Clarke, Robert Heinlein, and Ray Bradbury: planetary entrepreneurs, galactic empires, and firemen who burned books. In 1941, Asimov wrote a story about solar power stations in space transmitting energy back to Earth. Later, in 1951, Arthur C. Clarke explained in his book “The Exploration of Space” how satellites could be used for communications, while also referring to an older German idea dating back decades that proposed placing mirrors in space to reflect warming rays toward Earth — an early concept of climate control.

Moving forward to 1968, Peter Glaser, a consultant at Arthur D. Little, proposed building a solar power satellite. In 1989, a NASA committee issued a report on constructing fusion power stations on the Moon, and several committee members, including Glaser, argued that solar-powered satellites might be a better idea.

At this point, you may think that the concept of solar power satellites has led nowhere for nearly a century. And indeed, it may seem difficult to market such an idea to an industry still reliant on coal and struggling to keep the lights on during and after severe storms. But Elon Musk has entered the discussion, announcing that within three years he plans to place AI data centers powered by solar energy in space and beam data back to Earth. Jeff Bezos made a similar prediction late last year. More cautious observers believe the project could take ten years.

The economics are not yet viable. But we are talking about technology pioneers with ambitious visions and armies of enthusiastic investors eager to capture the next big opportunity, so fluctuating economic calculations are unlikely to stop them. Once such projects are built, the technology remains even if the original founders fail to achieve the financial returns they expected.

Now to the energy markets. If it becomes possible to launch a satellite equipped with solar panels to power AI data centers that consume electricity equivalent to a small city, would it be much harder to launch a solar power satellite capable of beaming enough energy to Earth to supply a small city? And would solar power satellites become suppliers for microgrids and small-scale systems, or for large centralized grids? We once believed the latter would be the answer, but we are no longer certain.

If space technology pioneers succeed, what would that mean for electricity demand on Earth from AI data centers, which have now become the only growth engine for the power industry, after the Donald Trump administration effectively declared that decarbonization and electric vehicles are “un-American”?

Have we been overreading science fiction? Science-fiction writers predicted submarines, travel to the Moon, ray weapons, mass surveillance, satellites, and intelligent — even malevolent — computers. They had vision. How many visionary executives in the electricity industry have you met recently?

Copper prices declined on Thursday, approaching their lowest level in about a week, after investors stepped in to buy the previous session’s dip and as industrial metals tracked the decline in technology stocks.

Traders in China — the world’s largest consumer of metals — were largely absent from the market due to the Lunar New Year holiday. Tom Price, an analyst at Panmure Liberum, said they “rarely leave large capital positions in the market” during the holiday period, adding that volatility tends to increase, which leads to dip-buying activity. “I think that will provide some support,” he said.

Brokerage firm Marex said in a note that the base metals complex is now taking its cues instead from the performance of technology stocks, particularly the Nasdaq index.

Copper inventories in London Metal Exchange warehouses rose for a twelfth consecutive day to reach 224,625 tons, the highest level in 11 months, with new inflows into warehouses in New Orleans and Kaohsiung.

US warehouses now account for around 18% of total copper available in exchange storage, while 538,122 tons remain in the US COMEX exchange.

“When inventories and copper prices rise together, there is something unusual happening,” Price said, adding that US copper consumption rates have declined over the past twelve months.

The London cash copper contract was trading at a discount of $97 per ton compared with the three-month futures contract, indicating no urgent need for immediate supply in the near term.

Peruvian equities upgraded on copper cycle support

Rising metals prices — driven by artificial intelligence demand and the recovery in global industry — led analysts at Oxford Economics to upgrade Peruvian equities to “Overweight” on Thursday.

The firm also maintained an “Overweight” rating on Brazil, based on expectations of interest rate cuts.

Analysts said Peru is best positioned to benefit from the copper cycle due to its heavy export reliance on the red metal, which is seeing strong demand driven by data center construction.

Although Chile is also a major copper producer, analysts pointed to downside risks including mine closures, strikes, and logistical bottlenecks, while keeping a “Neutral” rating.

In Brazil — which has a more diversified economy than its regional peers — analysts expect the anticipated rate-cut cycle to serve as a “powerful catalyst for local equity markets over the medium term.”

By contrast, Oxford Economics maintained an “Underweight” rating for both Mexico and Colombia, citing political uncertainty linked to trade negotiations between Mexico and the United States and Canada, in addition to the monetary tightening cycle in the Andean nation.

Meanwhile, the US dollar index rose by 0.2% to 97.8 points at 16:26 GMT, recording a session high of 98.07 and a low of 97.5.

During US trading hours, May copper futures were down 0.7% at $5.82 per pound at 16:14 GMT.

In recent trading sessions, Bitcoin fell sharply and dropped below $67,000 after the latest minutes of the Federal Reserve’s January meeting signaled a more hawkish stance toward interest rates and inflation. The move sent shockwaves through equity and cryptocurrency markets as traders reassessed expectations for US monetary policy and its impact on risk-based assets such as Bitcoin. The decline reflects growing investor caution amid uncertainty surrounding interest rates and broader economic conditions.

For many investors and analysts in equity research communities, the event highlights how macroeconomic policy decisions continue to influence digital assets such as Bitcoin despite these markets operating independently of traditional financial systems.

What happened to Bitcoin’s price

Bitcoin had previously traded above $68,000 but slipped below key support levels, trading around $66,000–67,000 as markets digested the Federal Reserve minutes. This represents a notable pullback from earlier gains this year when Bitcoin traded near significantly higher levels.

The minutes revealed that the Federal Reserve kept interest rates unchanged at 3.50 to 3.75 percent, but policymakers expressed concern that inflation remains elevated and suggested that future rate hikes could be necessary if price pressures do not ease. The tone surprised many market participants who had hoped for clearer signals toward rate cuts.

Higher interest rates tend to make riskier assets less attractive because investors can earn more from safer options such as bonds and Treasury yields. Bitcoin is often viewed as a speculative asset closely tied to broader market sentiment, so when interest rates rise or are expected to rise, Bitcoin’s price is typically affected negatively.

The importance of the Federal Reserve minutes for Bitcoin investors

Federal Reserve minutes provide important insights into how central bank officials view the economy and monetary policy strategy. Investors study these minutes to gauge future interest rate moves because rate changes affect liquidity and risk appetite across markets.

When the Federal Reserve signals a hawkish bias — meaning policymakers are prepared to keep interest rates higher for longer — investors reduce exposure to speculative assets and shift capital toward safer investments. Bitcoin’s drop below $67,000 reflects this shift in sentiment.

Short-term traders and institutional investors respond quickly to such signals by selling positions or hedging risk, further amplifying price volatility. For a crypto asset that does not generate dividends or interest, higher rates make other asset classes appear more attractive by comparison.

Impact on cryptocurrency market sentiment

Bitcoin’s decline also weighed on sentiment across the broader cryptocurrency market. Other major digital assets such as Ether and Ripple posted losses during the same period as investors pulled back from risk-exposed assets.

As the largest and most closely watched cryptocurrency, Bitcoin often serves as a leading indicator for broader crypto trends. When Bitcoin loses ground, other coins typically follow. This is one reason traders closely monitor Bitcoin’s price reaction after major economic events such as Federal Reserve announcements.

Risk appetite indicators — commonly tracked by market analysts — showed rising levels of “fear,” indicating that traders became more conservative toward risk in response to macroeconomic uncertainty.

Opportunities for long-term investors

Despite the decline, some long-term Bitcoin holders view the dip as a buying opportunity, particularly if they believe in Bitcoin’s long-term prospects as a digital store of value or hedge against inflation.

Large holders and corporate entities that accumulate Bitcoin over time may continue purchasing during dips to average entry costs and strengthen long-term positions.

Technical and market indicators

Technical indicators showed that Bitcoin entered oversold conditions as relative strength indicators fell to lower levels before stabilizing. This suggests that strong selling momentum pushed prices downward, but reduced selling pressure may create a base for potential rebound attempts.

Traders often watch support zones around $66,000 and resistance areas near $68,000 to gauge the direction of future moves. A break below these critical levels could signal further losses or the start of a deeper correction phase.

Trading volumes also increased during the selloff, indicating strong participation from both sides as Bitcoin’s price fluctuated.

Short- and long-term outlook

In the short term, Bitcoin may continue to experience elevated volatility as markets interpret evolving macroeconomic data and upcoming releases including inflation reports and employment figures. These data points will influence expectations for future Federal Reserve policy.

Over the longer term, many analysts see Bitcoin’s price influenced by a complex mix of fundamentals, supply and demand dynamics, investor adoption trends, and regulatory developments. Events such as equity market cycles and trends in institutional adoption of digital assets also play a key role.

While some view Bitcoin as a hedge against inflation or fiat currency weakness, others argue that its volatility may limit broader mainstream adoption until clearer regulatory frameworks emerge.