📊 Macro Watch: BOJ, Yen Liquidity & Crypto Risk

JPMorgan expects the Bank of Japan to hike rates twice in 2025, with policy rates potentially reaching 1.25% by end-2026. If this plays out, it could mark a meaningful shift after years of ultra-loose Japanese monetary policy.

🔹 Why the yen matters:

The yen has long funded global risk-taking through the yen carry trade. Rising BOJ rates could tighten yen liquidity and reduce leverage flowing into risk assets.

🔹 Carry trade unwind risk:

If Japanese yields rise and the yen strengthens, leveraged positions funded in yen may unwind. Historically, this has pressured equities and other risk assets during short-term adjustment phases.

🔹 Implications for crypto:

Bitcoin and crypto markets could see:

Short-term volatility from global de-risking

Tighter liquidity impacting speculative flows

Increased sensitivity to macro shifts rather than narratives

💡 Big picture:

While a yen-driven liquidity shift may create near-term headwinds, BTC continues to behave as a global liquidity barometer. Structural adoption and long-term fundamentals remain separate from short-term macro cycles.

👉 Do you think a yen carry trade unwind is back in play?

And how could this reshape crypto risk allocation in 2025–2026?

Share your views 👇

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