BOJ Rate Hike Looms: Can Crypto Weather a Stronger Yen?

The Bank of Japan's (BOJ) policy meeting on September 17-18, 2026 is widely expected to result in a rate hike. According to a Reuters poll, 57% of economists predict rates will rise to 1.25%, up from just 5% in July.

This potential rate hike could have significant implications for the cryptocurrency market, particularly Bitcoin (BTC), Ethereum (ETH), and XRP. A strong yen could lead to the unwinding of the yen carry trade, which involves borrowing yen at low interest rates to invest in higher-yielding assets.

Bitcoin faces the biggest risk from leverage unwinds tied to the yen carry trade. This is because BTC's price has been highly correlated with the value of the yen in the past.

Ethereum (ETH) and XRP may also experience a downturn if risk-off conditions emerge, leading to reduced liquidity, decreased DeFi/DEX activity, and negatively impacting token performance.