Japan’s Bond Yields Hit 1.98%: BOJ Rate Shift Impacts Gold, Silver, and Bitcoin

Core Viewpoint - The Bank of Japan's (BOJ) decision to raise interest rates to 0.75% has significant implications for global markets, particularly affecting bond yields, precious metals, and Bitcoin [1][3][5]. Group 1: Interest Rate Changes and Market Reactions - Japan's 10-year government bond yields surged to 1.98% in December 2025, marking the highest level since the 1990s [1][2]. - The anticipated 25-basis-point hike to 0.75% is seen as a modest change, but the speed of this adjustment is critical for market liquidity [3][4]. - Analysts suggest that Japan's yield movements are now a focal point for global capital, indicating that Japan's economic situation is increasingly relevant on the world stage [5][6]. Group 2: Impact on Precious Metals - Precious metals, particularly gold and silver, have surged by 135% and 175% respectively since early 2023, closely tracking Japanese bond yields [1][6]. - The rise in precious metals is attributed to increasing sovereign risk and tighter global liquidity, with gold serving as a hedge against these macroeconomic uncertainties [7][9]. - The silver market is exhibiting signs of speculative behavior, with the China Silver Futures Fund trading 12% above the physical metal, indicating heightened demand for leveraged exposure [8].