Bank of Japan Hikes Rates to 30-Year High as Yen Weakens – The Catalyst for Bitcoin Rebound?

Monetary Policy Changes - The Bank of Japan raised interest rates to 0.75%, marking the highest borrowing costs in three decades, which has implications for global crypto markets [1] - This rate increase represents Japan's most aggressive monetary tightening since 1995, although borrowing costs remain lower than in other major economies [2] Fiscal Policy and Debt Concerns - Prime Minister Sanae Takaichi's $117 billion stimulus package is largely funded by additional debt issuance, raising concerns about Japan's public debt, which is more than twice the size of its economy [3] - The combination of growing debt, higher interest rates, and aggressive fiscal spending creates uncertainty for Japan's economic outlook [3] Market Reactions - Market reactions were mixed, with the yen initially strengthening but later losing those gains as investors assessed the implications of the rate hike [3][4] - The initial strengthening of the yen was attributed to thin market liquidity, which amplified short-term price movements rather than reflecting a fundamental reassessment [4] Regulatory Developments in Crypto - The Financial Services Agency proposed requiring crypto exchanges to hold dedicated reserves against customer losses, a move aimed at enhancing security following significant breaches in the sector [5]