Bitcoin climbs past $77,000 as Bank of Japan lifts rates to 31-year high
BTC gained against both the dollar and the yen after the BOJ's 25-basis-point hike to 1.25%, while the yen slipped to 156.70 against the dollar.
Illustration · generated, not a photograph
The Bank of Japan raised its benchmark rate by 25 basis points on Friday, taking it to 1.25% — the highest since 1994-era levels three decades ago — and bitcoin responded by pushing above $77,000 as the yen weakened.
The central bank justified the move by pointing to the risk of inflation running above its 2% goal, citing climbing import costs and energy prices. It is the BOJ's second rate increase in three months.
The hike lands weeks after U.S. Treasury Secretary Scott Bessent urged Tokyo to tighten policy more quickly in order to prop up the yen. Bessent said an orderly market for the Japanese currency supports stability in the Treasury market, and characterized the coordinated purchase of yen as aligned with U.S. interests.
Bitcoin's moves were visible in both currencies. The BTC/JPY pair on Tokyo's bitFlyer exchange rose 0.5% to 12.06 million yen after the decision, while bitcoin's dollar price reached $77,400, building on a recovery from an overnight low of $76,200, according to CoinDesk data. The yen meanwhile slipped against the dollar, with USD/JPY moving from 156.20 to 156.70.
Why Japanese rates ripple through crypto
Japan's monetary policy has outsized effects on global markets because roughly a decade of near-zero rates at home led traders to borrow cheaply in yen and deploy the proceeds into higher-yielding assets abroad — a strategy known as the carry trade. A sharp reversal of those positions is widely seen as a systemic risk, and the equity and bitcoin sell-off of early August 2024 was widely interpreted as a preview of what such an unwind could do.
Yet analysts largely view that concern as excessive in the current environment. Even after Friday's increase, Japanese rates remain far below their U.S. counterparts, leaving a wide yield differential that continues to make yen-funded carry trades profitable.
The BOJ's decision followed the Federal Reserve's own 25-basis-point hike earlier this week, which lifted its target range to 3.75%-4.00% — the Fed's first increase since 2023. Investment banks including Goldman Sachs and Morgan Stanley are now forecasting another Fed move in October.
Source reporting
The outlets whose reporting this account was written from.
Written from the reporting and primary documents credited at the foot of this story. Facts are credited to the outlet or document that established them. How Chainpress works