Japan’s two-year JGB yield touched 1.975% on Monday, the highest since 1995; the five-year rose to 2.43% as well. This is the rates side pricing in expectations of further hikes.
The crypto market has not yet seen any direct corresponding change in fund flows, but if Japanese funding costs keep rising, the pressure on leveraged positions borrowed against yen may emerge. For now, we can only confirm that rates are moving; how the funding side will follow remains uncertain.
The next step hinges on two points: whether the two-year can hold above 2%, and whether the Bank of Japan’s comments on yen weakness become more direct. If yields keep rising, the pressure from unwinding yen carry trades will turn into an external variable that crypto markets need to watch.
The crypto market has not yet seen any direct corresponding change in fund flows, but if Japanese funding costs keep rising, the pressure on leveraged positions borrowed against yen may emerge. For now, we can only confirm that rates are moving; how the funding side will follow remains uncertain.
The next step hinges on two points: whether the two-year can hold above 2%, and whether the Bank of Japan’s comments on yen weakness become more direct. If yields keep rising, the pressure from unwinding yen carry trades will turn into an external variable that crypto markets need to watch.