Bank of Japan raised the rate to 1.25%.
The decision was expected, but the figure is still historic: the highest level in 31 years. Vote: 7 to 2.
And this is where things get more interesting for crypto. For decades, Japan has been one of the main sources of cheap funding via carry trade: borrow yen cheaply, then buy assets with higher yields.
When Japanese rates rise, this math gradually changes. In theory, it can put pressure on risky assets, including crypto, if carry-trade positions start to unwind.
But today $BTC hasn’t fallen apart—on the contrary, it traded above $77k. That’s a good example of why I don’t like the construction “the central bank did X—Bitcoin did Y.” The market is a bit more complex than a calculator.
Citi expects further rate hikes in December 2026 and throughout 2027. So what matters isn’t just today’s decision, but how quickly Japan actually withdraws cheap liquidity from the system.
I’ll be watching for that. If you want to break down macro without magical cause-and-effect connections, subscribe to @MoonMan567
The decision was expected, but the figure is still historic: the highest level in 31 years. Vote: 7 to 2.
And this is where things get more interesting for crypto. For decades, Japan has been one of the main sources of cheap funding via carry trade: borrow yen cheaply, then buy assets with higher yields.
When Japanese rates rise, this math gradually changes. In theory, it can put pressure on risky assets, including crypto, if carry-trade positions start to unwind.
But today $BTC hasn’t fallen apart—on the contrary, it traded above $77k. That’s a good example of why I don’t like the construction “the central bank did X—Bitcoin did Y.” The market is a bit more complex than a calculator.
Citi expects further rate hikes in December 2026 and throughout 2027. So what matters isn’t just today’s decision, but how quickly Japan actually withdraws cheap liquidity from the system.
I’ll be watching for that. If you want to break down macro without magical cause-and-effect connections, subscribe to @MoonMan567
