BOJ Rate Hike Fails to Spark Carry Trade Unwind

The Bank of Japan raised its key interest rate by 25 basis points to 1.25 percent on September 18, 2026, a move that could have significant implications for cryptocurrency investors.

The decision was not entirely unexpected, as the US Federal Reserve had also raised its target range by 25 basis points to 3.75 to 4.00 percent two days earlier.

However, what was notable about the Bank of Japan's move is that it failed to trigger an unwinding of yen-funded positions in the cryptocurrency market.

The reason for this lies in the interest rate gap between Japan and the US, which remained unchanged at 2.50 to 2.75 percentage points despite the double tightening.