Shiba Inu price recorded gains folowing a shift in the US dollar – Japanese Yen’s positioning. The US dollar declined after BOJ made an unexpected decision to shift its yield curve control policy. Heightened volatility may shape the crypto market as investors digest the news.
BOJ’s surprise decision
Last week comprised of several major economic events including the US inflation data and Fed interest rate decision. With investors shifting their focus to the end of year festivities, it appeared as though Shiba Inu price will experience low volatility for the remainder of the year.
However, the Bank of Japan’s surprise decision on Tuesday has increased volatility in the financial markets. Indeed, BOJ caught investors off guard by adjusting its yield curve control policy. The bank decided to widen its target range to allow the 10-year government bond yields to move 50 basis points on each side of its 0% target. This is a shift from the previous 25 basis points.
The move, whose impact is observable in bonds and stcok markets worldwide, is aimed to, “improve market functioning and encourage a smoother formation of the entire yield curve, while maintaining accomodative financial conditions”. Notably, BOJ’s yield curve control was introduced in 2016 following an extensive period of ultralow inflation and stagflation. It was aimed at increasing inflation towards the bank’s 2% target.
BOJ’s ultra-loose monetary policy comes at a time when most of the other major economies are using aggressive stances to deal with the persistent inflation. The recent decision by Japan’s central bank and the subsequent shift in the US dollar-Japanese Yen positioning is largely behind the gains recorded in Shiba Inu price on Tuesday.
Notably, a similar reaction was observable in other cryptocurrencies and the broader group of risk assets. This trend may continue in the ensuing sessions as the market digests the news.
Shiba Inu price prediction
On its four-hour chart, Shiba Inu price was trading below the 25 and 50-day exponential moving averages. Even so, I am cautiously bullish about the altcoin.
In the short term, it may rally further to find resistance at 0.00000876. However, I am of the opinion that the bulls will not find enough momentum to retest the psychological level of 0.00000900. On the lower side, this thesis will be invalidated by a move below 0.00000810.
