BOJ Signals More Rate Action as Yen Crashes Crypto Market on Edge 🚨

The Bank of Japan (BOJ) has reignited global market chatter after its December meeting minutes revealed intense debate over interest rates, even as the Japanese yen sinks to multi decade lows.

📌 Key Takeaways

BOJ officials admit Japan’s policy rate remains abnormally low compared to major economies

The central bank recently lifted rates to 0.75 percent, the highest level in over 30 years

Economists now expect more rate hikes within the next six months, with a projected terminal rate of 1.25 percent to 1.5 percent by 2027

Despite the yen’s sharp decline, BOJ members believe tighter policy may be necessary to control inflation and stabilize currency fluctuations. One board member noted Japan has the lowest real policy rate globally, signaling room for further tightening.

💱 Why This Matters for Crypto

For years, global investors have used the yen carry trade by borrowing cheap yen to invest in higher return assets like crypto. Rising Japanese yields could now force these leveraged positions to unwind.

⚠️ If borrowing costs keep rising

Risk assets may see reduced liquidity

Crypto volatility could spike

Investors may rotate away from speculative assets

📉 History supports this trend. Bitcoin has reacted sharply to BOJ moves in the past. It fell over 20 percent after BOJ decisions in March and July 2024, and dropped more than 30 percent following the January 2025 rate hike.

🔮 What’s Next

As Japan moves away from ultra loose monetary policy, global markets and crypto in particular are bracing for impact. Is another volatility wave coming, or is this already priced in?

👇 Stay alert. Big macro shifts are back in play.