# BOJRateHikesBackontheTable

BOJ Tightening, Yen Liquidity & Crypto Risk Allocation Is the Yen Carry Trade Unwind Back on the Table?
JPMorgan’s expectation that the Bank of Japan could hike rates twice in 2025, with policy rates potentially reaching ~1.25% by end-2026, may look modest in isolation. But in a global system built on decades of cheap yen funding, this shift carries outsized implications for cross-asset risk allocation including crypto.
This isn’t just about Japan. It’s about global liquidity plumbing.
Why the Yen Matters More Than Its GDP Share
For years, the Japanese yen has functioned as one of the world’

#BOJRateHikesBackontheTable
JPMorgan’s expectation that the Bank of Japan could raise rates twice in 2025, eventually pushing policy rates toward 1.25% by the end of 2026, is a major shift in the global macro landscape. For decades, Japan’s ultra-loose monetary policy made the yen one of the cheapest funding currencies in the world. That cheap liquidity didn’t stay confined to Japan it flowed into global markets, supporting equities, bonds, and increasingly high-beta assets like crypto. As Japan gradually normalizes policy, the implications extend well beyond domestic markets.
Rising Japanes

#BOJRateHikesBackontheTable
The yen matters to crypto far more than most people want to admit, not because Japanese retail is driving flows, but because the yen has quietly functioned as one of the cheapest sources of global leverage for decades. When money is effectively free in one currency, it doesn’t stay local. It becomes fuel for risk-taking elsewhere. Equities, credit, EM, venture, and yes, crypto, have all benefited at various points from yen-funded risk exposure. That’s why the Bank of Japan even hinting at a sustained normalization path changes the background liquidity regime, even

#BOJRateHikesBackontheTable
Macro Watch: Bank of Japan, Yen Liquidity, and Crypto Risk Allocation (2025–2026)
Global markets may be underestimating a potential macro shift unfolding in Japan. According to JPMorgan, the Bank of Japan is expected to raise interest rates twice in 2025, with policy rates potentially reaching around 1.25% by the end of 2026. If realized, this would represent one of the most meaningful transitions in Japanese monetary policy in decades, marking a clear departure from the era of ultra-loose conditions and negative real rates.
For global risk assets, this is not a lo