Bank of Japan Set to Hike Rates to 30-Year High, Posing Another Threat to Bitcoin

Markets Share Share this article Copy link X icon X (Twitter) LinkedIn Facebook Email Bank of Japan Set to Hike Rates to 30-Year High, Posing Another Threat to Bitcoin Rising Japanese rates and a stronger yen threaten carry trades and could pressure crypto markets despite easing U.S. policy. By James Van Straten , Omkar Godbole | Edited by Cheyenne Ligon Dec 13, 2025, 2:00 p.m. Osaka castle (Wikepedia) What to know : According to the Nikkei, the Bank of Japan (BoJ) is set to increase interest rates to 75bps, the highest level in 30 years. Rising Japanese funding costs, alongside falling U.S rates, could force leveraged funds to reduce carry trade exposure, increasing downside risk for bitcoin. The Bank of Japan (BoJ) is expected to raise interest rates for the first time since January, increasing the policy rate by 25 basis points to 0.75% from 0.50%, according to Nikkei . The decision, which is expected on Dec. 19, would take Japanese interest rates to their highest level in roughly 30 years. The broader impact on global markets remains uncertain; however, developments in Japan have historically been bearish for bitcoin BTC $ 90,378.26 and the wider cryptocurrency market. A stronger yen has typically coincided with downside pressure on bitcoin, while a weaker yen has tended to support higher prices. Yen strength tightens global liquidity conditions, which bitcoin is particularly sensitive to. STORY CONTINUES BELOW Don't miss another story. Subscribe to the Crypto Daybook Americas Newsletter today . See all newsletters Sign me up By signing up, you will receive emails about CoinDesk products and you agree to our terms of use and privacy policy . The yen is currently trading near 156 against the U.S. dollar, slightly stronger than its late November peak just above 157. The BoJ rate hike is said to have implications for the yen carry and could impact BTC via the equities channel. For decades, hedge funds and trading desks have borrowed yen at ultra-low or even negative rates to finance positions in higher beta assets, mostly tech stocks and U.S. Treasury notes, a strategy enabled by Japan’s prolonged period of loose monetary policy. The theory, therefore, is that a higher Japanese rate could dent the attractiveness of these carry trades and reverse the money flow, leading to broad-based risk aversion in stocks and cryptocurrencies. These fears are not unfounded. The last BOJ hike, which lifted rates to 0.5% on July 31, 2024, led to the yen rally and massive risk aversion in early August that saw BTC slide from roughly $65,000 to $50,000. This time could be different The impending hike may not lead to risk-off for two reasons . First, speculators are already holding net long (bullish) exposure in the yen, which makes a snap reaction to the BoJ hike unlikely. In mid-2024, speculators were bearish on yen, according to CFTC data tracked by Investing.com. Secondly, Japanese bond yields have risen throughout this year, hitting multi-decade highs at both the short and long ends of the curve. The upcoming rate hike, therefore, reflects official rates catching up with the market. Meanwhile, this week, the U.S. Federal Reserve cut rates by 25 basis points to a three-year low on top of introducing liquidity measures. The dollar index has dropped to a seven-week low. Taken together, these things suggest low odds of a pronounced "JPY carry unwind" and year-end risk aversion. That said, Japan's fiscal situation, with debt-to-GDP ratio of 240%, warrants close monitoring next year as a potential source of market volatility. "Under PM Sanae Takaichi, a big fiscal expansion and tax cuts arrive while inflation hovers near 3% and the BoJ keeps rates too low, still acting as if Japan were stuck in deflation. With high debt and rising inflation expectations, investors question BoJ credibility, JGB yields steepen, the yen weakens, and Japan starts to look more like a fiscal crisis story than a safe haven," MacroHive said in a market update. Bitcoin News Bank of Japan Interest Rates More For You Protocol Research: GoPlus Security By CoinDesk Research Nov 14, 2025 Commissioned by GoPlus What to know : As of October 2025, GoPlus has generated $4.7M in total revenue across its product lines. The GoPlus App is the primary revenue driver, contributing $2.5M (approx. 53%), followed by the SafeToken Protocol at $1.7M. GoPlus Intelligence's Token Security API averaged 717 million monthly calls year-to-date in 2025 , with a peak of nearly 1 billion calls in February 2025. Total blockchain-level requests, including transaction simulations, averaged an additional 350 million per month. Since its January 2025 launch , the $GPS token has registered over $5B in total spot volume and $10B in derivatives volume in 2025. Monthly spot volume peaked in March 2025 at over $1.1B , while derivatives volume peaked the same month at over $4B. View Full Report More For You DOT Sinks 2% After Breaking Key Support By CD Analytics , Will Canny | Edited by Oliver Knight 20 hours ago The Polkadot token erased earlier gains amid elevated volume, falling from a high of $2.09 to $1.97. What to know : DOT collapsed through ascending trendline support around the $2.05 level on a massive 284% volume surge. The token broke decisively below the support level to trade 2% lower over the last 24 hours. 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