Japan Signals More Hikes: Bitcoin Has Crashed After Every Single One

Bank of Japan (BOJ) Governor Kazuo Ueda indicated that the central bank's rate-hiking cycle is ongoing, following a recent hike to 0.75% in December. Ueda stated they will continue raising rates in line with economic and inflation improvements, aiming for stable inflation and growth. This hawkish stance has caused Japan's 10-year bond yield to rise to its highest level since 1999, reflecting expectations of further increases. The BOJ noted that Japan's real policy rate remains the lowest globally, suggesting significant room for further hikes (100-175 basis points). This tightening is straining Japan's financial system, evidenced by Norinchukin Bank reporting massive losses. For Bitcoin, rising Japanese rates threaten the yen carry trade, where investors borrow cheap yen to invest in riskier assets; historical data shows Bitcoin falling 20-31% after previous BOJ hikes as this liquidity drains. Traders are watching the January 23 policy decision closely, as another hike or accelerated tightening could trigger sharp yen strengthening and rapid carry trade unwinding, pressuring crypto markets.

(Source：BeInCrypto)