Bitcoin's recent macro relief faces a challenge from Japanese interest rates

Markets Bitcoin's recent macro relief faces a challenge from Japanese interest rates Japanese bond yields continue to rise, lifting their U.S. counterparts and posing a potential headwind for risk assets. By Omkar Godbole | Edited by Sheldon Reback Jul 7, 2026, 7:50 a.m. 2 min read Make preferred on Share Share this article Copy link X icon X (Twitter) LinkedIn Facebook Email Make preferred on Japanese yields challenge the recent macro relief on the bitcoin price. (AhmadArdity /Pixabay) Summary Show Yields on 10-year Japanese government bonds have jumped to a 30-year high, raising borrowing costs across major developed markets and threatening bitcoin’s recent rebound. Rising global bond yields increase the opportunity cost of holding bitcoin, which offers no income, and could offset the boost from softer U.S. inflation risks and weaker-than-expected job growth. The bitcoin price has climbed 8% to $64,000 this month on shifting Federal Reserve interest-rate expectations, but some banks, including Goldman Sachs, still favor yen-funded carry trades. Japanese bonds are challenging the boost bitcoin BTC $ 63,284.17 has received from shifting interest-rate expectations that lifted the price of the largest cryptocurrency by 8% in fewer than seven days. The 10-year Japanese government bond (JGB) yield has surged to a 30-year high of 2.85%, adding 18 basis points since the start of the month and raising borrowing costs across other major developed markets. The U.S. 10-year Treasury yield has gained nearly three basis points and is testing 4.5% for the first time in nearly a month. The German 10-year bund is approaching 3% and the U.K. 10-year gilt is yielding around 4.8%. Real yields, which are adjusted for inflation, are also climbing. For years, Japan kept global yields suppressed through near-zero interest rates and aggressive quantitative easing. That policy fueled carry trades that involved borrowing yen at a low rate and investing in high-yielding bonds elsewhere. Thus, Japan indirectly capped borrowing costs in advanced nations. This matters for bitcoin because higher government bond yields increase the opportunity cost of holding an asset that generates no cash. Capital parked in BTC is capital not earning the stronger, more reliable returns available in fixed income. The recent yield increases risk reversing the tailwind from this month's developments that prompted traders to dial back expectations for higher U.S. interest rates. The first catalyst came on July 1 when Fed Chair Kevin Warsh said inflation poses less of a risk than it did a few weeks ago. The second was Thursday’s June nonfarm payrolls report, which showed the U.S. added only about half the number of jobs forecast, while the labor force participation rate fell to a more than five-year low of 61.5%. Bitcoin found strong support near $58,000 on July 1 and has since rallied to around $64,000, largely on the back of those developments. But the hardening of global yields, led by Japan, could pour cold water on that bounce. Still, not everyone is worried. Despite the rise in Japanese yields, Goldman Sachs says it expects the yen to continue weakening and maintains a preference for yen-funded carry trades. 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