Bank of Japan raises rates to a 31-year high: the cost of JPY carry trades steps up again; on ETH below 2748, I’ll keep waiting
My stance is not bearish in the medium term, and I’ll keep observing in the short run. Japan’s rate hikes can’t be wrapped up with a single phrase like “bearish for crypto.” First, they affect JPY funding and global leverage costs, and then they transmit to ETH through shifts in risk appetite. The timing is sometimes lagged, and it may also be priced in by the market in advance.
In the Bank of Japan’s official documents dated September 18, the policy board approved—7 to 2—the target for the unsecured overnight call rate to be raised to about 1.25%. The new guidance takes effect on September 24. The supplementary deposit rate is同步 to 1.25%, and the basic lending rate is 1.5%. The BoJ also said that underlying inflation is nearing 2%; if economic, price, and financial conditions align with the baseline, the BoJ will continue raising policy rates going forward. AP calls 1.25% the highest level in 31 years, which matches the current hot topic on Binance Square.
What truly matters for the crypto market isn’t the headline “31 years,” but the marginal cost of the JPY carry trade. For a long time, low-interest JPY has been one of the global funding currencies; as rates rise, it squeezes the spread on borrowing JPY to fund high-volatility assets, and in extreme cases it may lead to deleveraging. ETH is usually more sensitive than BTC to changes in risk appetite because it simultaneously captures on-chain application demand, staking yield, and high-beta trading demand. That said, this decision was released on September 18, so the market has had time to digest it. If the yen doesn’t appreciate quickly and global yields don’t keep surging, it’s not appropriate to mechanically blame every ETH pullback on the BoJ.
On the chart, ETH perpetuals are currently around $2722, with a 24-hour range of 2573 to 2748.38. After pushing to 2748, price didn’t keep expanding. Recently, trading has mainly been between 2706 and 2745. The funding rate is about +0.0016%, clearly lower than roughly +0.0079% in the previous cycle. Open interest is about 629,100 ETH, with a notional value of about $1.713 billion. Price holding at a high level while the funding rate cools suggests that chasing-long sentiment has eased somewhat, but 2748 still hasn’t been confirmed as a breakout.
Looking back at the public plan at 19:32: at the time, I waited for reduced-volume support between 2708 and 2718, then recaptured 2732 on a 15-minute close, targeting 2748 to 2755. After that, price repeatedly returned to that support zone and regained above 2732, but the high only reached 2748.38—there was no effective breakout through the pressure zone. This only means the plan conditions and the first observation zone were touched by the market; it doesn’t indicate actual fills or profits. The old plan is now obsolete.
If I were trading it myself, I’m currently keeping a 0 position. The first plan is to wait for 2708 to 2715 to again hold with reduced volume; then re-close above 2732 on the 15-minute timeframe, and use 3% of principal for a light long. First target: 2748 to 2755; second target: 2780 to 2810; at 2748, cut one-third. After entry, if it breaks below 2702, cut half. If the 1-hour close is below 2682, exit fully. The second plan is to wait for a volume-assisted close above 2755, and then a retest that holds above 2738; use only 2% of principal to follow. If it drops back to 2725, close immediately.
If ETH first breaks below 2708 with volume and then can’t reclaim 2720 on the bounce, I’ll at most use 0.7% of principal with low leverage to试空, targeting 2682 and 2650. If it reclaims 2735 on a 15-minute basis, stop out immediately. Around before and after the policy takes formal effect on September 24, if yen and global bond volatility expands, I will actively cut the position size by another half and won’t go heavy betting on direction in the macro window.
#BOJRaisesRatesTo31YearHigh $ETH
The above is only my personal market observations and does not constitute investment advice.
My stance is not bearish in the medium term, and I’ll keep observing in the short run. Japan’s rate hikes can’t be wrapped up with a single phrase like “bearish for crypto.” First, they affect JPY funding and global leverage costs, and then they transmit to ETH through shifts in risk appetite. The timing is sometimes lagged, and it may also be priced in by the market in advance.
In the Bank of Japan’s official documents dated September 18, the policy board approved—7 to 2—the target for the unsecured overnight call rate to be raised to about 1.25%. The new guidance takes effect on September 24. The supplementary deposit rate is同步 to 1.25%, and the basic lending rate is 1.5%. The BoJ also said that underlying inflation is nearing 2%; if economic, price, and financial conditions align with the baseline, the BoJ will continue raising policy rates going forward. AP calls 1.25% the highest level in 31 years, which matches the current hot topic on Binance Square.
What truly matters for the crypto market isn’t the headline “31 years,” but the marginal cost of the JPY carry trade. For a long time, low-interest JPY has been one of the global funding currencies; as rates rise, it squeezes the spread on borrowing JPY to fund high-volatility assets, and in extreme cases it may lead to deleveraging. ETH is usually more sensitive than BTC to changes in risk appetite because it simultaneously captures on-chain application demand, staking yield, and high-beta trading demand. That said, this decision was released on September 18, so the market has had time to digest it. If the yen doesn’t appreciate quickly and global yields don’t keep surging, it’s not appropriate to mechanically blame every ETH pullback on the BoJ.
On the chart, ETH perpetuals are currently around $2722, with a 24-hour range of 2573 to 2748.38. After pushing to 2748, price didn’t keep expanding. Recently, trading has mainly been between 2706 and 2745. The funding rate is about +0.0016%, clearly lower than roughly +0.0079% in the previous cycle. Open interest is about 629,100 ETH, with a notional value of about $1.713 billion. Price holding at a high level while the funding rate cools suggests that chasing-long sentiment has eased somewhat, but 2748 still hasn’t been confirmed as a breakout.
Looking back at the public plan at 19:32: at the time, I waited for reduced-volume support between 2708 and 2718, then recaptured 2732 on a 15-minute close, targeting 2748 to 2755. After that, price repeatedly returned to that support zone and regained above 2732, but the high only reached 2748.38—there was no effective breakout through the pressure zone. This only means the plan conditions and the first observation zone were touched by the market; it doesn’t indicate actual fills or profits. The old plan is now obsolete.
If I were trading it myself, I’m currently keeping a 0 position. The first plan is to wait for 2708 to 2715 to again hold with reduced volume; then re-close above 2732 on the 15-minute timeframe, and use 3% of principal for a light long. First target: 2748 to 2755; second target: 2780 to 2810; at 2748, cut one-third. After entry, if it breaks below 2702, cut half. If the 1-hour close is below 2682, exit fully. The second plan is to wait for a volume-assisted close above 2755, and then a retest that holds above 2738; use only 2% of principal to follow. If it drops back to 2725, close immediately.
If ETH first breaks below 2708 with volume and then can’t reclaim 2720 on the bounce, I’ll at most use 0.7% of principal with low leverage to试空, targeting 2682 and 2650. If it reclaims 2735 on a 15-minute basis, stop out immediately. Around before and after the policy takes formal effect on September 24, if yen and global bond volatility expands, I will actively cut the position size by another half and won’t go heavy betting on direction in the macro window.
#BOJRaisesRatesTo31YearHigh $ETH
The above is only my personal market observations and does not constitute investment advice.
