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A Reuters poll showed that 65% of economists surveyed expect the Bank of Japan to raise its key interest rate to 1.00% in June.A Reuters poll shows that the Bank of Japan is expected to raise interest rates to 1.25% in the fourth quarter and to 1.50% in the third quarter of 2027 (unchanged from the April poll results).The Governor of the Central Bank of Malaysia stated that the country will inevitably be directly and indirectly affected by the Middle East conflict. The Malaysian economy is expected to remain resilient in 2026, with growth projected at 4%-5%. Despite external headwinds, technological expansion will support export growth. Strong domestic demand will provide strong support against external headwinds.Central Bank of Malaysia: Indicators show that overall price conditions remained relatively under control as of early May. Overall inflation is expected to rise slightly in 2026. The ringgit remains resilient despite ongoing Middle East conflicts.On May 15th, the Bank of Japan stated that Japan may face another round of across-the-board price increases around the summer as businesses ranging from food manufacturers to hot spring resorts consider passing on soaring energy costs caused by the Middle East conflict to consumers. In a report based on a survey of regional businesses conducted from January to April, the Bank of Japan noted that many service sector companies are gradually passing on rising raw material and labor costs to consumers, abandoning their long-standing practice of maintaining low prices. The report stated that rising energy costs due to the Middle East conflict have also prompted companies to accelerate price increases in their fiscal year business plans starting in April. Some companies, including those in the food, restaurant, and hot spring resort industries, have decided to raise prices at a faster pace. The report stated, "Other companies indicated they will soon decide whether to raise prices. As for the specific timing, some companies indicated they will decide around the summer or later." This report highlights the Bank of Japans growing concern about accumulating inflationary pressures in the economy, which could provide further justification for a near-term interest rate hike.

Fidelity To Boost Crypto Adoption With Bitcoin 401(k) Plan

Skylar Shaw

Apr 27, 2022 10:09

Subject to employer clearance, Fidelity will soon allow US-based 401(k) retirement savers to allocate up to 20% of their portfolio to bitcoin.


Analysts applauded the news as yet another step toward widespread use of digital assets.

US officials, on the other hand, have advised businesses to "exercise extreme caution."

What Went Wrong?

According to a WSJ story published Tuesday, US asset management firm Fidelity Investments will allow retirement savers to invest up to 20% of their 401(k) account in bitcoin later this year, making it the first large US retirement-plan provider to do so.


Employees at the roughly 23,000 organizations that presently use Fidelity to administer their 401(k) retirement plans will soon be able to diversify their funds into bitcoin. Employers will decide how much (up to 20%) of their employees' 401(k) funds can be allocated to bitcoin, if at all.


In the United States, company-sponsored 401(k) retirement savings plans allow employees to benefit from tax reductions while saving, as well as having their retirement pot augmented by employee contributions.

Bitcoin's Mainstream Adoption Gets a Boost

Fidelity Investments' latest statement has been lauded by cryptocurrency specialists as another step towards the mainstream for digital assets.


Fidelity is the largest retirement plan provider in the United States, with over 20 million individual accounts and $2.7 trillion in assets under administration.


"Fidelity's adoption of bitcoin could encourage wider acceptance among employers," analysts at the Wall Street Journal hypothesized, adding that "the support of the nation's largest retirement-plan provider shows crypto investment is moving more into the mainstream."


Following the launch, Dave Gray, Fidelity's head of workplace retirement programs and platforms, stated, "we have noticed growing and organic interest from clients," particularly those with younger employees.


"A diversified selection of products and financial options is required for our investors," he stated. "We fully expect cryptocurrencies to influence how future generations think about investing in the short and long term."

Pushback from Regulators

Fidelity's move comes after the US Department of Labor (DoL) issued a warning to employees last month about using their 401(k) savings accounts to invest in digital assets.


Employers should "consider adding a cryptocurrency option to a 401(k) plan's investment menu with extreme caution," according to the Department of Labor. Employers who plan to sell cryptocurrencies in 401(k) plans should expect to be questioned about how they will "square their conduct with their duties of prudence and loyalty under US pension law," according to the department.


Given bitcoin's and the wider cryptocurrency market's reputation for volatility, as well as regulatory cautions, it'll be interesting to watch how many risk-averse companies opt for Fidelity's bitcoin 401(k) plan.

Wild Bitcoin Swings Are No Longer a Thing — Fidelity Executive

Fidelity's move to allow employers to allocate 401(k) account funds to bitcoin aligns with one of the company's executives, Jurrien Timmer, who recently stated that the dramatic fluctuations observed in BTC/USD in recent years are a thing of the past.


"Until recently, Bitcoin would often exceed its inherent value to the upside during bull markets and to the downside during bear markets," Timmer wrote on Twitter. Until the trend reached exhaustion, it was a momentum game with little to no pushback."


Timmer, on the other hand, stated that, in contrast to previous supply curves, bitcoin is now more closely following a demand curve based on bitcoin network growth/the rise in the number of users.


According to Timmer, this makes bitcoin a more efficient two-way market. "As more investors gain a greater understanding of Bitcoin's value, there may be more efficient accumulation when it swoons, and more determined distribution when it moons... This is what distinguishes a two-way market."

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