Bitcoin Under Pressure as Japanese Bond Yield Hits 17-Year High, Yen Depreciates

Core Insights - Bitcoin recently reached new all-time highs in both U.S. dollar and Japanese yen, driven by the new Japanese Prime Minister Takaichi Sanae's ultra-easy Abenomics policy [1] - The expansionary fiscal policy under Abenomics may lead to increased bond supply, negatively affecting the fiscal outlook [2] - Rising yields on Japanese government bonds (JGB) are impacting investor sentiment and increasing borrowing costs, which could reduce the appeal of riskier assets like Bitcoin [3][4] Bond Market Impact - The 10-year JGB yield reached 1.70%, the highest since July 2008, with a weekly increase of 13.31 basis points and a yearly increase of over 76 basis points [3] - Volatility in Japanese bonds may influence global bond markets, with potential upward pressure on U.S., German, and U.K. yields following shocks in JGB [5] Currency Dynamics - The dollar index has risen to a two-month high, largely due to a 3.5% depreciation of the Japanese yen against the USD since Friday [6] - A stronger dollar often leads to financial tightening, which can limit the upside for Bitcoin and other dollar-denominated assets [7] - While Bitcoin's rally has stalled, gold prices have surged past $4,000 an ounce as investors seek safe-haven assets [7]