Key notes
- The US CPI was lower than the expected 3%.
- Japan’s CPI also fell, but the central bank raised interest rates by 25 basis points.
- Bitcoin, along with many top altcoins, showed steady growth right after the macro announcements.
Falling inflation in the United States and Japan has raised hopes for looser Fed policy, while Japan’s surprise rate hike has increased global pressure for tightening. The US consumer price index showed inflation of 2.7% year-on-year for November, lower than the 3.1% expected, according to data on Investing.com. This is the first US CPI report since late October.
Similarly, Japan also saw a slight decline in its year-on-year CPI in November, from 3% to 2.9%.
The Bank of Japan, however, announced that it had decided to raise its interest rates by 25 basis points, to 0.75%, on Thursday, December 19.
The Bank of Japan raised its benchmark interest rate to the highest level in 30 years. BoJ Governor Kazuo Ueda said the policy council unanimously decided to raise the rate by 0.25 percentage points to 0.75 percent, citing growing confidence in the economic outlook. Shortly after the…
-Wu Blockchain (@WuBlockchain) December 19, 2025
According to Wu Blockchain, this is the highest interest rate level in the country in 30 years. A higher rate can strengthen the Japanese yen and attract capital to Japan.
On tOn the other hand, rising rates can also move money away from risky assets like cryptocurrencies and into safer bonds and currency positions, thereby tightening liquidity globally.
Mixed signals, but good reactions
Slowing inflation in the two major economies has triggered capital inflows into risky assets such as cryptocurrencies and stocks, despite rising rates in Japan. For example, the S&P 500 gained 0.79% to 6,774.7, and the global crypto market cap increased 0.7% to $2.93 trillion. According to a report from Coinspeaker, José Torres, senior economist at Interactive Brokers, a slowdown in inflation would not only trigger a year-end recovery, but would likely pave the way for further rate cuts in 2026.
Bitcoin
BTC
$88,189
24h volatility:
0.4%
Market capitalization:
$1.76 ton
Flight. 24h:
$41.11 billion
rose 1.2% to nearly $88,000. Ethereum
ETH
$2,981
24h volatility:
1.1%
Market capitalization:
$359.47 billion
Flight. 24h:
$21.61 billion
gained 4%, reaching $2,950. Historically, the crypto market can normally experience volatility, rapid ups and downs, following CPI reports and interest rate decisions.
These movements suggest that assets at risk ofI handled the mixed news related to falling inflation and rising interest rates well.
The next macroeconomic signals to watch would be signals from the US Fed, movements in the yen in the coming months and global liquidity level.
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Wahid has been analyzing and reporting on the latest trends in the decentralized ecosystem since 2019. He has over 4,000 articles to his credit and his work has been featured in some of the leading media outlets including Yahoo Finance, Investing.com, Cointelegraph, and Benzinga. Besides reporting, Wahid likes to connect the dots between DeFi and macro in his newsletter, On-chain Monk.
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