In recent days, the global financial market has witnessed a major shift from Japan – a country that has long been seen as a stable foundation for risk capital, including cryptocurrencies like Bitcoin. The Japanese yen is strengthening, long-term bond yields have reached their highest levels since 1994, and the Bank of Japan (BOJ) may be about to implement a major policy shift. In this context, Bitcoin – which relies heavily on abundant liquidity – may become one of the first victims.



Yen surges, bond yields explode


This week, the yield on 30-year Japanese government bonds surged to 2.345%, the highest in 30 years, marking a significant turning point in Japan's fiscal policy.

Notably, according to sources from #FXCE , the USDJPY exchange rate has dropped sharply from 158.87 (on January 10, 2025) to 142.10 (on April 11, 2025) – a significant decline indicating a remarkable recovery strength of the yen.


According to experts from Goldman Sachs – led by former BOJ chief economist Akira Otani – if the yen continues to strengthen and approaches 130, the BOJ may be forced to pause interest rate hikes and lower inflation expectations for 2026. However, if the yen weakens again above 160, the BOJ may have to tighten policy further. Both scenarios directly impact risky assets like Bitcoin.



Risky assets are at risk of 'capital rotation'


Bitcoin often 'benefits' in low interest rate environments with abundant liquidity. However, with Japanese bond yields rising sharply, the attractiveness of fixed assets is returning, leading to a potential capital rotation out of risky assets.


Agne Linge – Development Director at the decentralized bank WeFi – believes this is a 'major signal of a trend change for risky assets.' In particular, carry trade – the strategy of borrowing cheap yen to invest in other assets – is gradually losing its appeal due to rising borrowing costs. At that point, the demand to hold yen in place also increases, limiting the flow of money into crypto.


Another perspective comes from Aravanan Pandian – CEO of the KoinBX exchange – who believes that the BOJ's loose monetary policy has long been the foundation for global risk appetite. However, if the BOJ decides to halt or tighten its yield curve control (YCC) program, investment capital may withdraw sharply from the crypto market, creating a large-scale capital repatriation wave.



Not everyone is pessimistic


Although the outlook seems bleak, not everyone believes Bitcoin will weaken in the long term. Marcin Kazmierczak – COO of RedStone (a modular oracle platform) – suggests that the current crypto market is much stronger than in previous cycles.


Kazmierczak recalled the moment in 2016 when the BOJ adjusted its policy, causing Bitcoin to drop 15%, but it rebounded strongly within just six months afterward. According to him, the limited supply of 21 million BTC is the key factor that helps Bitcoin maintain its value in an environment of changing monetary policy.


Additionally, the situation in the U.S. also creates a balancing force: inflation is slowing down, both CPI and PPI are cooling, putting pressure on the Federal Reserve (Fed) to lower interest rates. If this happens, it could partially neutralize the impact from the BOJ, preventing the crypto market from being completely 'bled dry.'



Investor sentiment remains positive


As of now, Bitcoin is trading around $85,210, up 0.6% in 24 hours and up 8.2% for the week (according to CoinGecko). This indicates that investors still have positive expectations for the world's leading digital asset.


According to the decentralized prediction platform MYRIAD (part of Decrypt), up to 55% of users believe Bitcoin will hold the $85,000 level until the end of Wednesday, reflecting short-term optimism despite macroeconomic volatility from Japan.



Impact on crypto users and Binance


For the investor community on Binance, this information is particularly important. If the BOJ changes its policy, the market could enter a 'risk-off' state, leading to a temporary price adjustment for BTC and altcoins. Those trading on margin or futures need to be especially cautious about exchange rate fluctuations and global macroeconomic policies, especially from G7 countries like Japan.


However, if the Fed truly begins to lower interest rates, this could open up new opportunities for Binance users – especially those pursuing medium- and long-term investment strategies in Bitcoin.



Conclusion


The policy change of the Bank of Japan is not just a domestic issue. As the yen strengthens, bond yields surge, and carry trade reverses, all global financial markets will be affected, including crypto. But instead of being overly concerned, investors need to closely monitor signals from the BOJ and Fed to adjust their investment strategies accordingly.



⚠️ Risk warning: The cryptocurrency market is highly volatile and not suitable for all investors. Any investment decision should be thoroughly researched. This article should not be viewed as financial advice. #anhbacong