Rates Hold, Inflation Pressures

Daily Updates:

• The Bank of Japan (BOJ) decided unanimously to keep interest rates (uncollateralized overnight call rate) steady at “around 0.5 percent”, stating that Japan's economy has recovered moderately, with some weakness in parts.
• Japan’s CPI has ranged at 3.0-3.5% YoY as service prices continue to rise, and inflation expectations have risen moderately. Exports and industrial production have been flat, while employment and income have improved moderately.
• However, high uncertainties remain regarding Japan's economic outlook, pointing to the global uncertainty created by the unknown extent of Trump’s Tariffs. The BOJ name global trade policies, commodity prices, and exchange rate developments, which are now more likely to impact inflation.

‍

• The FOMC is widely expected to keep the federal rate unchanged between 4.25%-4.5%. Chair Jerome Powell and his colleagues have emphasised a patient approach as they seek greater clarity on economic conditions and trade policies.
• However, it is the committee’s quarterly Summary of Economic Projections that is in greater focus, which will give an update on how policymakers view inflation, growth, and future rate cuts.

‍

• Coinbase has launched Verified Pools, a non-custodial liquidity pool for institutional and retail traders, enabling DeFi swaps and trades. Built on Coinbase’s Layer 2 network, Base, and powered by Uniswap v4, the pools operate in partnership with risk management firm Gauntlet, which oversees liquidity and performance.

‍

• A new report by Coinbase and EY paints a bullish picture for crypto and institutional trading. The survey amongst institutional investors boasts statistics such as 59% of them will allocate over 5% of AUM to crypto in 2025, 73% hold altcoins beyond BTC and ETH and 57% are interested in tokenized assets for diversification. The report points out that regulatory concerns are a key limiting factor in adoption, and most institutional investors prefer to gain access via registered vehicles such as ETFs.

‍

• CME Group has introduced SOL futures, marking a key development in institutional crypto trading, with futures available in standard (500 SOL) and micro (25 SOL) contract sizes and cash-settled based on the CME F Solana-Dollar Reference Rate. The launch followed FalconX’s first block trade of SOL features with StoneX, executed to manage risk and price exposure on a regulated value. 

‍

• Xapo Bank, has introduced bitcoin-backed loans of up to $1M, positioning itself in the growing crypto-lending space. The initiative aims to offer an alternative to what Xapo describes as “predatory” lending practices in the industry.
• As financial institutions continue expanding crypto-backed services, this move highlights the growing integration of digital assets into traditional finance.

• Strategy (MSTR), is offering 5,000,000 shares of its 10% Series A Perpetual Strife Preferred stock to the public. The preferred stock will carry a $100 liquidation preference per share and will pay cumulative quarterly dividends at a rate of 10% annually.

This Week’s Calendar:

Charts of the Day: