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BlockBeats News, October 21, Japan's crypto and financial markets are simultaneously experiencing a historic turning point. The Financial Services Agency (FSA) of Japan is pushing for reforms, proposing to allow banks to hold digital assets such as bitcoin for investment purposes and to register as cryptocurrency exchanges. If the bill passes, it will end the strict ban in place since 2020, enabling banks to allocate crypto assets in the same way as stocks and bonds. Regulators plan to establish a risk protection framework to ensure financial stability and promote banks' participation in the market ecosystem. This move may reshape Japan's position in the global digital financial system. On a macro level, Japan's economy is currently facing a mix of high debt and deflationary pressures. If banks are allowed to legally allocate digital assets, it will provide new channels for capital flow and sources of revenue. With banks such as Mitsubishi UFJ and Mizuho already launching stablecoin projects, policy relaxation will enable Japan to play a more active role in regional financial competition. For Japan, this is not only a regulatory innovation but also a signal of rebalancing its sovereign financial structure. At the same time, Sanae Takaichi is about to become Japan's first female prime minister, advocating for the continuation of "Abenomics"-style expansionary fiscal policies. After the announcement, the Nikkei Index hit record highs for two consecutive days, as the market bets that her new policies will maintain low interest rates and increase industrial investment. Capital is shifting from bonds and the yen to equities and high-risk assets such as crypto assets. Bitunix analysts believe that the dual turning points in Japan's financial system—policy liberalization and political transition—may signal a new cycle for Asian asset structures. The legalization of banks holding crypto will elevate bitcoin's status as a "sovereign-grade asset," while the sharp divergence between stock and forex markets also suggests that capital is seeking new safe havens. Future focus will shift to the details of the regulatory framework and the pace at which banks enter the market, which will determine the next phase of volatility and capital structure in the crypto market.

BlockBeats News, October 21, Masamichi Adachi, Chief Japan Economist at UBS Global Research, stated in a commentary that it seems justified for the Bank of Japan to raise interest rates in the coming months. He noted that Japan's real interest rates are negative, which makes the financial environment very accommodative. Inflation dynamics appear to support the view that the central bank should reduce its accommodative policy, citing the expectation that long-term inflation expectations will continue to rise toward 2.0%. He also anticipates that the government will seek fiscal expansion, which could mean higher inflationary pressures. UBS expects the Bank of Japan to raise its policy rate by 25 basis points in January, but does not rule out the possibility of a rate hike in December. (Golden Ten Data)