Bitcoin and yen steady amid softer inflation data in Japan and the Bank of Japan’s decision to hold rates.

Bitcoin (BTC $88,754.76) and the Japanese yen, which have closely tracked each other in recent weeks, traded largely flat on Friday after Japan reported a slowdown in inflation and the Bank of Japan (BOJ) held interest rates steady.

Japan’s headline consumer price index (CPI) rose 2.1% year-on-year in December, down from November’s 2.9%, while core inflation, which excludes fresh food, eased to 2.4% from 3%, according to the Ministry of Internal Affairs and Communications. Core-core inflation, which strips out both food and energy, remained sticky at 2.9%, highlighting persistent underlying price pressures, analysts at ING noted.

“The slower headline and core figures may encourage a wait-and-see approach, even as persistent core-core inflation could support further policy normalization,” ING said.

In a near-unanimous decision, the BOJ kept its benchmark rate at 0.75%, while raising growth and inflation forecasts for fiscal 2025 and 2026, citing ongoing expansionary fiscal support.

Bitcoin remained range-bound near $90,000, while the yen fell slightly to 158.70 per U.S. dollar. Analysts noted that the yen’s weakness could weigh on Bitcoin, given the 90-day correlation between the two sits at 0.84.

The 10-year Japanese government bond yield rose 3 basis points to 1.12%, reflecting fiscal concerns and expectations of future BOJ rate hikes. Rising Japanese yields earlier this week pushed global borrowing costs higher, weighing on risk assets and contributing to Bitcoin’s midweek dip below $88,000. Prices have since stabilized near $90,000, CoinDesk data show.