The Bank of Japan meets on March 18 and 19. Like the subheading says, the news flow on a likely tightening of policy is relentless.

The Nikkei had this:

Bloomberg (gated) has canvassed MUFG (Mitsubishi UFJ Financial Group is a Japanese financial services group that is the largest in the world measured by assets) and reports this:

• “Given the stronger-than-expected wage talk outcome, the BOJ will likely ditch negative rates and yield curve control next week,” said veteran BOJ watcher Naomi Muguruma, chief bond strategist at Mitsubishi UFJ Morgan Stanley Securities.
  
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  “The BOJ could have waited until April if the wage talk outcome wasn’t this strong. But with markets already pricing in the chance of an exit, it would actually be a surprise if the bank forgoes ditching negative rates next week,” she said.

From a separate report, on Rengo, a federation of unions, saying its members have so far secured deals averaging 5.28%, a figure that far outpaces the initial 3.8% tally from a year ago and easily the highest in 30 years:

• “This clears the last hurdle for the BOJ and I think it will scrap its negative rate next week and make a shift toward policy normalization,” said Taro Saito, head of economic research at NLI Research Institute. “If they stand pat now, markets will get volatile and the yen is likely to plunge.”

And, Reuters:

• Upon exiting its negative rate policy, the BOJ will also ditch its bond yield control and discontinue purchases of risky assets such as exchange-traded funds (ETF), sources have told Reuters

I did convey more cautious thoughts from UBS:

But I think they may be standing in front of a freight train.

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The BOJ announcement will come sometime after 0230 GMT on Tuesday 19 March. The Bank doesn’t have a firmly scheduled time for its meeting statement, it never does.

Renowned author of “Rich Dad Poor Dad” Robert Kiyosaki recently underscored Bitcoin’s supremacy over traditional assets like gold and silver. In a social media post, Kiyosaki expressed his preference for Bitcoin due to its fixed supply, contrasting it with the dynamic nature of gold and silver prices. 

He highlighted the inherent limitation of Bitcoin’s supply to 21 million coins, a factor that distinguishes it from precious metals and commodities like oil.

Kiyosaki’s remarks come at a time when Bitcoin’s price experienced a notable decline, dipping more than 6.5% in the past 12 hours. Despite this setback, Bitcoin is still hovering around $68,400, merely 9% lower than its record high, marking a remarkable ascent in recent times.

The author’s confidence in Bitcoin’s future prospects appears unshaken, as evidenced by his earlier prediction of BTC reaching $300,000 by 2024. Kiyosaki’s bullish stance on cryptocurrency underscores a growing sentiment among investors and financial pundits, who see the cryptocurrency as a formidable store of value and investment opportunity.

Paradigm shift

Bitcoin’s meteoric rise in recent years has garnered significant attention from both retail and institutional investors, with many viewing it as a hedge against inflation and economic uncertainty. Its decentralized nature and fixed supply have contributed to its allure, positioning it as a digital alternative to traditional assets.

While volatility remains a characteristic feature of the cryptocurrency market, proponents like Kiyosaki remain undeterred in their conviction of Bitcoin’s long-term potential. As the debate between traditional assets and digital currencies continues, “Rich Dad’s” endorsement adds weight to Bitcoin’s status as a dominant player on the financial landscape, signaling a potential paradigm shift in investment preferences.

Higher interest rates exude a bearish influence on gold because gold does not contain any intrinsic yield. When fixed income assets such as treasuries have high yields it diminishes the allure for gold. This scenario is the economic environment that we find ourselves in today.

One-Two Punch

This week two important reports revealed new data concerning current inflationary pressures. The Consumer Price Index revealed that inflation for February came in hotter than expected. Yesterday’s release of the most current Producer Price Index revealed that producers raised the price of their goods by 0.6% during the month of February. Because a hot PPI is a precursor to a hot CPI we can expect that inflation this month could continue to be elevated.

This has pressured gold off the highs achieved last Friday. Tuesday’s release of the CPI took gold futures down $25, and on Wednesday gold recovered gaining back approximately $15 of Tuesday’s decline. For the remainder of the week, gold softened but still did not trade to a lower low than the low achieved on Tuesday.

One week ago, gold futures challenged $2200 per ounce and traded to a high of $2203. The price of gold above $2200 for the first time in history was short-lived, but the fact that gold has remained above $2150 all week is a sign that a base is being formed, and we may see that price tested again soon. Gold has been extremely resilient and able to hold onto most of its recent gains even with moderate headwinds from dollar strength, and higher treasury yields.

Gold Futures Hold Steady Amidst Anticipation of Fed’s March FOMC Meeting