The Bank of Japan raised its policy rate to 1.25% this week. For a crypto account this matters less as a Japan story and more as a funding story.
1. The move. Up from 1%, a 25 basis point hike approved 7-2. That is the highest policy rate since 1995, and it came three months after the June increase, the shortest gap since the BOJ ended large-scale easing in 2024.
2. The pace matters more than the level. 1.25% is still low in absolute terms. What changed is the rhythm: six-month intervals became three.
3. The channel to crypto is funding cost, not sentiment. For years Japan supplied some of the cheapest borrowing in the world, and that money financed positions everywhere. As that funding gets more expensive, the marginal buyer of risk assets has to justify the trade differently.
4. One hike does not tighten global conditions overnight. Oil, inflation and the pace of the next few decisions will matter more than this single move.
What decides the next leg is the path, not this meeting. What are you watching on that?
Not financial advice. Do your own research.
1. The move. Up from 1%, a 25 basis point hike approved 7-2. That is the highest policy rate since 1995, and it came three months after the June increase, the shortest gap since the BOJ ended large-scale easing in 2024.
2. The pace matters more than the level. 1.25% is still low in absolute terms. What changed is the rhythm: six-month intervals became three.
3. The channel to crypto is funding cost, not sentiment. For years Japan supplied some of the cheapest borrowing in the world, and that money financed positions everywhere. As that funding gets more expensive, the marginal buyer of risk assets has to justify the trade differently.
4. One hike does not tighten global conditions overnight. Oil, inflation and the pace of the next few decisions will matter more than this single move.
What decides the next leg is the path, not this meeting. What are you watching on that?
Not financial advice. Do your own research.