Japan Carry Trade - What It Means For $BTC

Japan’s next interest rate decision on 18–19 December is an important macro event that could affect $BTC .

This ties back to the “Japan carry trade,” where investors could borrow cheap Japanese Yen, and deploy it into higher-yield assets like the US Dollar

For years, this made Japan a cheap funding source due to its low interest rates.

That changed in March 2024, when Japan hiked rates for the first time in 17 years, followed by another hike in July and one more earlier this year, pushing rates to levels last seen in 2008.

Historically, after each Japan rate hike since 2024, $BTC has tends to retrace for roughly 42–77 days.

With another rate hike now likely in December, we could see another retracement in BTC.

However, I don’t expect the impact to be as bad as previous hikes, as it's partially offset by rate cuts by the US and other countries.