Lorenzo Protocol(BANK) Regular Invest

A day before the Bank of Japan's (BOJ) interest rate decision announcement, the Japanese yen surged nearly 3% against the US dollar. The sharp move in the currency market fueled speculation that the Japanese government may have intervened again to support the yen. The USD/JPY pair fell over 400 pips to 158.5, its steepest daily drop since Japan's currency intervention earlier this year. Market participants suspect the rapid, strong yen appreciation could be due to direct foreign currency sales by Japanese authorities, though the Ministry of Finance has made no official statement. The yen had previously fallen to its weakest level against the dollar in nearly 40 years. In late April and May, the government intervened with roughly 9.6 trillion yen to prevent the USD/JPY from rising sustainably above 160, but the yen faced renewed selling pressure afterward. Investors are now focused on the BOJ's rate decision and its signals on future monetary policy. Potential hawkish signals from the BOJ are seen as a factor that could support further yen strength. A sharp yen appreciation could create short-term selling pressure on Bitcoin by increasing the risk of unwinding carry trades, where investors borrow low-yielding yen to invest in Bitcoin and other risky assets. This pressure could intensify if the BOJ takes a hawkish stance or raises interest rates.

Institutional investors significantly increased gold purchases in Q2 2026, achieving a quarterly record. According to the World Gold Council (WGC), central bank net buying surged to 288.9 tons, a 62% rise from Q2 2025 (177.9 tons). This represents a sharp recovery from the revised net accumulation of just 57 tons in Q1. The recovery was driven by increased buying from Poland's National Bank and the People's Bank of China, coupled with reduced selling from Turkey and Russia. The National Bank of Poland was the largest buyer in Q2, purchasing 51 tons to progress toward its 700-ton national reserve target. The People's Bank of China made its largest purchases since Q4 2023, raising its official reserves to 2,346 tons, with reports suggesting additional undeclared accumulation. Uzbekistan, Kazakhstan, Jordan, and the Czech Republic also contributed to the demand. Conversely, the Bank of Russia was the largest seller in Q2 at 22 tons, reportedly to cover a federal budget deficit, while Turkey slowed its selling pace. Despite the strong Q2, total central bank demand for 2026 fell to a low of 345 tons due to significant sales from Turkey, Russia, and Azerbaijan earlier in the year. A WGC survey indicates continued momentum, with 89% of central bank respondents expecting to increase gold reserves over the next 12 months.

The Bank of Japan (BOJ) kept its benchmark interest rate at 1% on July 31, as widely expected, following a June hike to a 31-year high. The decision passed with an 8-1 vote, with board member Hajime Takata again dissenting in favor of a hike to 1.25%. Despite holding rates steady, the BOJ signaled a hawkish tilt, warning that underlying inflation is likely to accelerate and exceed 2% from the latter half of the fiscal year. While it slightly lowered its core inflation forecast for FY2026, officials expressed stronger confidence that an overshoot will occur later, driven by yen weakness, corporate pricing behavior, and lingering energy shock effects. Markets were focused on the BOJ's forward guidance. Analysts noted the central bank appeared to balance short-term caution with a long-term warning of tighter policy. Governor Kazuo Ueda faces the challenge of reconciling a government reluctant to tighten further with bond markets already pricing in additional hikes, with the timing of the next move debated. Adding complexity, the BOJ reportedly intervened in currency markets hours before the rate decision, buying yen to support the currency which had fallen to 40-year lows against the dollar. Yen weakness stems from the wide U.S.-Japan interest rate gap, high fuel prices, and market skepticism about the pace of BOJ policy normalization. The yield on Japan's 10-year government bonds fell to 2.8%, indicating investor expectations for future monetary tightening.

The Bank for International Settlements (BIS) has announced the completion of initial real-value trials for Project Agorá, a tokenized cross-border payment system. The trials involved 28 central and commercial banks settling approximately $1 million (800,000 Swiss francs) across 17 different transaction scenarios. The system successfully used tokenized central bank reserves and commercial bank deposits to process payments in six major currencies, with average settlement times of around 80 seconds. Participants included major central banks such as the Bank of England and Bank of Japan, alongside global commercial institutions like JPMorgan Chase and Citi. Launched in 2024, Project Agorá aims to explore how tokenization can improve wholesale cross-border payments, with this phase marking a key milestone. The BIS confirmed testing will continue as the project develops.

The Bank of Korea has announced the results of its pilot test for tokenized deposits. Involving 28 central banks and international financial organizations, the project saw participation from major South Korean banks including KB Kookmin Bank, NH NongHyup Bank, Shinhan Bank, Woori Bank, and Hana Bank. Transactions, from payment orders to final settlement, were completed in real time, averaging just 80 seconds. The test involved 30 transactions across 17 different scenarios—such as corporate and interbank transfers—and was conducted in six currencies, including the Korean won, US dollar, and euro, with a total transaction value reaching approximately $995,000. The central bank reported that the platform operated stably throughout, despite being only partially connected to the existing banking infrastructure. Settlements using tokenized deposits were executed seamlessly, quickly, and transparently. An internal transfer of 20 million won (about $13,890) between NH NongHyup Bank and Shinhan Bank was also successfully processed via the Project Agora platform, which involved connecting to the Bank of Korea's CBDC test platform, Project Hangang. Additionally, KB Kookmin Bank and Japan's MUFG Bank tested cross-border payments using these deposit tokens—digital certificates issued by commercial banks within the pilot, not directly by the central bank. The Bank of Korea plans to continue testing payments with tokenized deposits. This follows last year's pledge by South Korean authorities to tighten regulations for won-based stablecoins, which will require approval from both the central bank and the Financial Services Commission.