Disappointing economic data from two of the world’s largest economies is fueling expectations that central banks may hold off on further interest rate hikes, a scenario that could provide indirect support to cryptocurrency markets.
Japan’s household spending fell 3.3% year-on-year in June, a third consecutive monthly decline that sharply missed forecasts of a 1% rise, according to the Ministry of Internal Affairs and Communications. The figure underscores persistent consumer caution despite modest wage gains and complicates the Bank of Japan’s plans to normalize policy. With consumption accounting for over half of Japan’s GDP, the weak reading suggests domestic demand remains fragile, increasing the likelihood that the BOJ will maintain its ultra-accommodative stance.
Meanwhile, French industrial output inched up only 0.1% in June versus a 0.3% forecast, as reported by the national statistics office. While manufacturing output rose 0.3%, declines in mining, energy, and construction offset the gains. Weak industrial performance in the eurozone’s second-largest economy adds to concerns about the bloc’s growth outlook and may give the European Central Bank room to pause its rate-hiking cycle.
The back-to-back misses reinforce a narrative of slowing global demand and easing price pressures. Markets now anticipate that both the BOJ and ECB will adopt a more cautious approach, avoiding near-term liquidity tightening. In the crypto space, such expectations are typically viewed as favorable, because lower borrowing costs and loose monetary policy tend to increase appetite for risk assets like Bitcoin and ether. However, the data also raises fears of a broader economic downturn, which could cap any immediate upside.
