Foreign media report that the Bank of Japan may raise its benchmark interest rate from 0.75% to 1.0% at its meeting on June 15–16. This expectation has once again exposed crypto markets to macroeconomic pressures: if Japan’s financing costs continue to rise, global liquidity available for risk assets could tighten, and digital assets like Bitcoin often react first.
First, observe changes in liquidity.
The report, citing the Nikkei Asian Review, states that Japanese policymakers are leaning toward another interest rate hike to address inflation risks. For the crypto market, the impact extends beyond Japan’s borders. For years, Japan’s ultra-low interest rate environment has supported yen carry trades, with many institutions borrowing yen at low cost, converting it into dollars or stablecoins, and investing in higher-yield markets such as equities and crypto assets.
If interest rates rise to 1.0%, the financing costs for such trades will continue to increase, prompting some capital to reduce leverage and shrink risk exposure. As traders buy back yen to repay financing, global market liquidity could be drained, and crypto assets, which are traded 24/7 and can be liquidated more quickly, are typically the first to face selling pressure.
After the January rate hike, Bitcoin quickly declined.
The article notes that after the Bank of Japan raised interest rates to 0.75% in January, Bitcoin dropped by approximately 3% within hours of the announcement. This is seen as a direct reference: changes in Japan’s monetary policy are sufficient to influence digital asset pricing in the short term.
Similar reactions have also occurred in the foreign exchange market. During the increased volatility in May, the USD/JPY pair briefly plunged to 157.57 before recovering. Markets typically view a stronger yen as a signal of carry trade adjustments, which often spill over into risk assets such as stocks and cryptocurrencies.
High-risk tokens may face more pronounced pressure.
Foreign media, citing market commentary, said that if the Bank of Japan continues to raise interest rates this month, the risk of a short-term pullback may rise again. Bitcoin, with deeper liquidity, typically absorbs selling pressure first; Ethereum, due to its central role in the DeFi ecosystem, may also face additional pressure. Altcoins and meme coins, which have thinner liquidity and rely more heavily on speculative capital, often experience steeper declines during periods of liquidity contraction.
However, the report also mentioned a relatively moderating factor: in addition to raising interest rates, the Bank of Japan is reportedly considering whether to pause further reductions in its purchases of Japanese government bonds starting April 2027. If implemented, this arrangement would indicate that Japan, while addressing inflation, remains reluctant to withdraw support from financial markets too quickly.
Next, market focus will turn to the meeting itself on June 15–16, as well as the Bank of Japan’s statements regarding its future interest rate path and liquidity arrangements. For the crypto market, what truly impacts short-term volatility is not just whether rates are raised, but whether the policy tone is more hawkish than expected.