Why did the Bank of Japan's interest rate hike not trigger significant risk aversion in the crypto market?
Recently, the Bank of Japan's interest rate hike did not lead to notable risk aversion in the crypto market, mainly based on the following key factors:
1. Speculative Position Structure: Market speculators currently hold a net long position in yen, making it difficult for policy changes to trigger a rapid reversal in their operations;
2. Bond Yield Already Reflected: The yield on Japanese short-term and long-term government bonds has been rising steadily this year, with the curve reaching new highs repeatedly, and the market has already digested these expectations.
Additionally, this week the Federal Reserve announced a 25 basis point rate cut, bringing rates to their lowest level in three years, along with liquidity support measures, further easing the financial environment. Under these circumstances, the likelihood of large-scale unwinding of yen arbitrage trades is low, and the market's risk aversion sentiment at the end of the year is also expected to be limited.
