🇯🇵 Japan Rate Hike Incoming: Why Crypto Markets Care
The Bank of Japan (BoJ) is signaling a shift away from decades of ultra-easy policy. Markets are now pricing in a rate hike to the highest level in ~30 years, driven by persistent inflation and rising wages.
What’s happening:
• BoJ turning more hawkish after years of near-zero rates
• Potential move to ~0.75% policy rat
• Marks a major change in global liquidity dynamics
Why this matters for crypto 📉📈
1️⃣ Yen carry trade unwind
Cheap yen was used to fund risk assets (stocks, crypto).
Higher rates → stronger yen → capital pulled back from risk.
2️⃣ Global liquidity tightens
Less cheap money = more volatility for high-beta assets like crypto.
3️⃣ Sentiment impact (short term)
Even expectations of tightening can trigger leverage unwinds and sell-offs, especially in weak market conditions.
Does this mean crypto will crash?
Not guaranteed. Some of this may already be priced in, but short-term volatility risk is real.