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Cryptopolitan 2025-12-19 16:02:49

Bank of Japan raises rates to 0.75%; Is Bitcoin going to slide?

The Bank of Japan raised interest rates to 0.75%, pushing borrowing costs to their highest level since 1995. The move comes as inflation remains high in the country. The yen is still weak against the dollar, and real wages keep falling. The crypto market did not react harshly. Bitcoin has climbed to $88,176.99 while Ether is at $2,976.43. But both coins are still in the red in the past seven days. BOJ said the decision was unanimous Members of the BOJ policy board voted unanimously. They agreed to raise the short-term policy rate from 0.5% to 0.75%. The decision came after a two-day meeting that began on Thursday. As reported by Cryptopolitan, the outcome was anticipated. Many economists foresaw it. This is the central bank’s first rate hike since January of 2025. The BOJ has been carefully considering when to raise rates. It is watching the impact of US tariffs on Japan’s economy and monitoring wage growth. Uncertainties about tariffs have eased. Japanese firms are expected to raise wages next year, according to a statement from the bank. Japan is the fourth-largest economy in the world. The yen is gaining some strength against the US dollar and other major fiat currencies. For the Japanese people, this means cheaper fuel and imported goods. Following the BOJ announcement, Japan’s 10-year government bond prices slid further after months of continuous pressure. Yields rise as prices fall. This drove yields above 2% for the first time since 2006, pointing to continued weakness in bond prices. Is Bitcoin going downhill? Due to the yen carry trade, Bitcoin could slide by 30%. The yen carry trade involves borrowing cheaply in yen to invest in higher-risk assets. Investors may start offloading their risky investments in assets such as Bitcoin and Ether, driving the market further down. However, Crypto entrepreneur Arthur Hayes has been advocating for a weaker yen. Earlier in the day, Hayes voiced his input about a weaker Japanese yen. He said, “Don’t fight the BOJ: -ve real rates is the explicit policy.” Don’t fight the BOJ: -ve real rates is the explicit policy. $JPY to 200, and $BTC to a milly. pic.twitter.com/PdZh87ruVI — Arthur Hayes (@CryptoHayes) December 19, 2025 Hayes predicts that the JPY will jump to 200 against the dollar. This scenario will drive capital into the crypto market, pushing Bitcoin to $1 million. But the Bank of Japan governor, Kazuo Ueda, said real interest rates remain deeply negative. He added that interest rates will continue to rise and the BOJ will not stop if economic data aligns with its forecast. The governor did not offer more details on the pace of interest rate increase. The upcoming weeks will reveal the direction of the crypto market. As Christmas and New Year’s approach, crypto markets could trade sideways or slide further due to the holidays. If you're reading this, you’re already ahead. Stay there with our newsletter .

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