Japan's $150B Stock Market Wipeout Triggers Global Liquidity Concerns

A $150 billion wipeout in Japan's stock market has experts wondering if this stress could spill into global liquidity conditions, affecting Bitcoin and XRP.

The Nikkei 225 fell by about 2% following fresh US-Iran military strikes, while the yen weakened past 160 per dollar, its worst level since a coordinated intervention in late July. Japanese 10-year bond yields hit a fresh 30-year high of 2.95%.

The link between Japan's market stress and Bitcoin lies in the yen carry trade, where investors borrowed cheap yen to fund higher-yielding positions elsewhere. As Japanese bond yields rise, that funding becomes more expensive, forcing some trades to unwind and tightening global liquidity.