During the Hong Kong trading session, yields on Japan’s short-term bonds reached their highest levels since 2008. This development strengthened the Japanese yen and increased pressure on leveraged positions in the cryptocurrency market, resulting in a decline in the prices of Bitcoin and other digital currencies. The Bank of Japan (BOJ) has become the focus of market attention due to potential policy changes. After a prolonged period of maintaining low interest rates, the BOJ has recently raised the possibility of increasing rates, which has contributed to the rise in Japanese bond yields. This shift has made global investors, particularly those investing in cryptocurrencies using borrowed funds, more cautious. Bitcoin and other cryptocurrencies, known for their volatility, are affected by such financial changes. When interest rates rise, traditional financial assets like bonds and currencies tend to strengthen, while riskier assets such as cryptocurrencies may weaken, especially for investors employing leverage. Consequently, increased volatility is expected in the crypto market, prompting investors to reassess their strategies. Overall, changes in Japan’s financial markets and BOJ policies are impacting the global cryptocurrency market, highlighting the need for investors to exercise caution and adapt to the evolving market conditions.
Source: coindesk
