The Bank of Japan raises interest rates to 0.75%, the yen weakens, pushing Bitcoin price above $87,000

Amid heightened attention in the global financial markets, the Bank of Japan announced a 25 basis point increase in the short-term policy rate to 0.75%, reaching a nearly 30-year high and marking Japan’s further exit from decades of ultra-loose monetary policy. Although the rate hike itself signals tightening, market reactions have differed from traditional expectations.

The Bank of Japan stated in its policy announcement that, influenced by rising import costs and domestic inflation, Japan’s inflation rate has been above the 2% official target for an extended period. However, the central bank also emphasized that even after this rate hike, the real interest rate adjusted for inflation remains negative, and the overall monetary environment remains accommodative. This statement has somewhat alleviated market concerns about rapid monetary tightening.

Following the rate decision, the foreign exchange market responded first. The yen weakened against the US dollar, falling from 155.67 to 156.03, indicating that the market had already priced in the rate hike expectations, and some investors chose to take profits after the “dust settled.” Meanwhile, the cryptocurrency market showed signs of strengthening. According to CoinDesk data, Bitcoin’s price surged from about $86,000 to $87,500, then slightly retreated, stabilizing around $87,000 at press time.

Market participants noted that this movement aligns with the logic of “buy the rumor, sell the fact.” In the previous weeks, speculative funds had already positioned themselves in long yen positions, and the announcement of the rate hike did not trigger a new wave of large-scale buying. Bond yields steadily increased, also weakening the short-term momentum for the yen to strengthen significantly.

Earlier, some observers worried that the rate hike by the Bank of Japan might trigger a rapid appreciation of the yen, leading to concentrated yen carry trades closing out and triggering risk aversion in global markets. However, analysis suggests that these concerns have been exaggerated. Currently, market expectations for a bullish yen are highly concentrated, and the impact of the rate hike on risk assets is relatively limited.

In this context, cryptocurrencies like Bitcoin are viewed by some investors as tools to hedge against macroeconomic uncertainties. The weakening yen combined with the still-loose global liquidity environment has supported Bitcoin prices. As major central banks’ policies gradually become clearer, the influence of macro factors on Bitcoin price volatility continues to deepen, and market attention is expected to remain high.