Tokyo CPI drops to 2% as the rally in gold and silver leaves Bitcoin behind in 2025

Source: Yellow Original Title: Tokyo CPI Falls to 2% While Gold and Silver Rally Leave Bitcoin Behind in 2025

Original Link: Tokyo’s inflation cooled to 2% in December from 2.7% in November, easing concerns over price pressures in Japan’s capital.

The decline occurred ahead of the Bank of Japan’s monetary policy meeting at the end of January.

The BoJ raised rates to 0.75% last week, the highest level in approximately three decades.

Despite the slowdown in inflation, the central bank indicated that further rate hikes are likely if economic conditions support greater tightening.

What happened

Tokyo’s core consumer price index, which excludes fresh food, increased by 2.3% year-on-year in December.

This was a decrease from the 2.8% recorded in November and fell short of economists’ expectations of 2.5%.

The moderation was mainly due to lower utility costs and a slower rise in food prices.

All three inflation indicators remain above the BoJ’s 2% target, suggesting that underlying price pressures persist despite the slowdown.

The Federal Reserve cut interest rates three times in the second half of 2025, bringing the total reduction since September 2024 to 1.75 percentage points.

Markets now price in two additional cuts in 2026.

However, precious metals, rather than cryptocurrencies, captured investors’ attention throughout 2025.

Gold increased by over 70% and surpassed $4,500 per ounce, marking its best annual performance since the late 1970s.

Silver rose approximately 150% to reach historic highs above $72 per ounce.

Platinum appreciated over 150%, recording its largest annual gain at least since 1987.

The Bitcoin (BTC) Coinbase Premium Index fell to its lowest monthly level, indicating a weakening of US institutional demand despite macroeconomic conditions that have historically favored digital assets.

Why it matters

The divergence between the performance of precious metals and cryptocurrencies in 2025 questions assumptions about digital asset demand during periods of monetary easing and inflation concerns.

Traditional safe-haven assets dominated investor portfolios despite three consecutive rate cuts by the Fed.

Gold, silver, and platinum attracted capital that in previous market cycles might have flowed into Bitcoin.

This shift reflects evolving investor preferences in an environment of persistent economic uncertainty.

Geopolitical tensions, concerns over currency devaluation, and industrial demand for metals created favorable conditions for traditional commodities.

The narrative of Bitcoin as a “hedge” lost momentum, as investors showed a preference for tangible assets with established industrial applications.

The rally in metals was driven by both monetary and industrial factors.

Silver benefited from strong demand in solar panel manufacturing and electronic component production.

Platinum was supported by supply restrictions in South Africa and changes in catalyst requirements for the automotive industry.

Japan’s slowing inflation may provide limited support to risk assets.

The BoJ’s commitment to further rate hikes suggests that monetary conditions in Japan will continue to tighten.

The increase in Japanese rates typically strengthens the yen, which can put pressure on dollar-denominated assets, including cryptocurrencies.

US investors showed a lower risk appetite in 2025 despite the Fed’s accommodative policy.

The preference for metals over digital assets indicates skepticism about the role of cryptocurrencies during periods of economic uncertainty.

Bitcoin advocates argue that the asset needs longer time horizons to demonstrate its correlation with changes in monetary policy.

Critics point out that the prolonged rally in metals suggests that investors seeking inflation hedges found more attractive alternatives.