Web3 Major news today: Bank of Japan announces interest rate hike!

On December 19, 2025, the Bank of Japan (BOJ) announced a rate hike as widely expected by the market, raising the benchmark interest rate by 25 basis points to 0.75%, reaching the highest level since 1995.

More importantly, the BOJ explicitly stated in its latest monetary policy statement: if the economic outlook continues to materialize, the rate hike path is not over. This statement quickly reinforced market expectations that the BOJ will continue to tighten monetary policy in the future.

Under the previous years of extremely loose monetary environment, this shift by the BOJ not only has profound implications for Japanese assets but also begins to introduce new variables into the global financial markets and crypto assets.

1. Why is the BOJ choosing to raise rates now?

The BOJ’s rate hike is not driven by a single event but is a concentrated reflection of long-term structural economic changes.

First, the BOJ believes that its long-standing goal—achieving a positive cycle of stable inflation and moderate wage growth—is gradually taking shape. In recent years, Japan’s inflation has remained above the BOJ’s target range, and corporate wage negotiations have significantly improved, boosting confidence that inflation is not temporary.

Second, from the policy stance, the BOJ’s assessment of the economic outlook has improved markedly. The Monetary Policy Committee unanimously approved the rate hike with a 9:0 vote, reflecting a high level of internal consensus, which is rare in BOJ history.

More importantly, the policy statement explicitly mentions that the rate hike cycle will continue. As a result, the market quickly formed the consensus that the BOJ may continue to raise rates at a semiannual pace, with a mid-term interest rate target around 1.5%.

2. What does the BOJ’s rate hike mean for global financial markets?

Although Japan’s interest rates are still relatively low globally, the symbolic significance of this policy shift far exceeds the actual numerical level, mainly impacting the global financial markets in three ways.

First is the marginal tightening of global liquidity. Over the past decade, Japan has been the world’s most important source of “low-cost funds,” with large amounts of capital flowing into risk assets worldwide via yen financing. Once Japanese interest rates rise, some arbitrage trades (such as yen carry trades) face withdrawal pressures, changing the funding environment for global risk assets.

Second is the rebound in the attractiveness of Japanese assets. As interest rates rise, the relative yield on Japanese government bonds and domestic assets improves, potentially prompting some international funds to flow back into Japan, indirectly weakening risk appetite in other markets.

Finally, the divergence of major central bank policies will intensify. With the Fed approaching a policy turning point and the ECB becoming more cautious, the BOJ’s “catch-up” rate hikes push the global monetary policy into a more complex multi-track phase, increasing market volatility.

3. Why did this news initially cause a decline in the crypto market?

When the BOJ’s rate hike news was first released, the crypto market experienced a noticeable decline. The core reason was not directly related to crypto assets themselves but stemmed from a short-term contraction in macro risk appetite.

First, there were concerns that Japan’s rate hike might trigger the withdrawal of arbitrage funds from risk assets, including US stocks, tech stocks, and highly volatile crypto assets. Under this expectation, some funds chose to reduce risk exposure in advance.

Second, the rate hike signals reinforced the expectation that “global liquidity is no longer synchronized in easing.” For assets highly dependent on liquidity, such macro signals are often amplified in the short term.

Therefore, the crypto market’s correction was more a reaction to macroeconomic uncertainty sentiment rather than deteriorating fundamentals.

4. Why did Bitcoin’s price stabilize rather than continue falling today?

It is noteworthy that after the initial decline, Bitcoin’s price volatility significantly converged today, and the overall trend stabilized. This reflects a re-pricing of the market’s perception of the BOJ’s policy impact.

On one hand, the rate hike by the BOJ was already highly anticipated by the market, and this decision itself did not constitute an “unexpected shock.” Once the information was fully digested, selling pressure naturally eased.

On the other hand, Bitcoin’s current valuation logic is quite different from earlier. With the rise of spot ETFs and increased institutional participation, Bitcoin is increasingly viewed by some investors as a long-term asset or macro hedge rather than purely a high-risk speculative instrument.

Additionally, from a global perspective, although the BOJ has shifted to rate hikes, its policy pace remains relatively moderate, and it has not caused a direct impact on global dollar liquidity in the short term. This is also a key reason why BTC has been able to stabilize.

5. How will Japan’s future rate hike cycle affect the crypto market?

In the medium to long term, Japan’s entry into a rate hike cycle is more likely to have a structural rather than a purely linear bearish impact on the crypto market.

If major global central banks gradually converge their policies, markets will pay more attention to the intrinsic attributes and long-term narratives of assets. For Bitcoin, its scarcity, anti-inflation properties, and institutional allocation logic may establish a clearer long-term valuation foundation.

However, for highly leveraged, narrative-driven altcoins, tightening liquidity margins could lead to greater differentiation, with funds increasingly concentrating on core assets with good liquidity and strong consensus.

Overall, Japan’s rate hike does not necessarily mean the crypto market will enter a long-term bear market, but it does serve as a reminder that the global “zero interest rate era” is gradually ending, and risk assets will become more reliant on fundamentals and structural logic.

Summary

The BOJ’s rate hike is an important part of the global monetary policy environment change. Its impact is not limited to the yen market but also transmits through liquidity and risk appetite channels to global assets, including crypto markets.

In the short term, crypto assets may continue to be sensitive to macro events. However, as the market gradually digests the policy path, the trends of core assets like Bitcoin will be more driven by their own supply-demand structure and long-term narratives. In the “post-extreme easing era,” the market may enter a more rational and differentiated stage.

Disclaimer

This article is for informational sharing and market research reference only and does not constitute any investment advice or trading recommendation. Cryptocurrency prices are highly volatile, and macro policy changes may bring uncertain risks. Users should make cautious decisions based on their own circumstances.