BoJ Rate Hold Sends Yen Carry Trade Risk Soaring for Bitcoin

The Bank of Japan (BoJ) kept its policy rate at 1.0% after its July meeting, while maintaining a tightening bias.

Japan's Ministry of Finance confirmed yen buying and dollar selling intervention on July 30, which sent USD/JPY sharply lower before the pair recovered later.

Despite the recent intervention, the BoJ's decision to hold rates at 1.0% highlights that monetary policy support is still lacking for a sustained trend reversal in the yen.

The narrowing US-Japan rate differentials and a softer dollar could pressure the yen carry trade, which is a major funding source for leveraged risk assets, including Bitcoin.