Japan's Rate Hike Sparks Yen Strength and Potential Crypto Selling Pressure

The Bank of Japan has raised its interest rate to 1.25%, the highest level in 31 years, following pressure from US Treasury Secretary Scott Bessent.

The decision was made at a meeting on September 18th and marks the sixth interest rate hike this year, with previous increases in June and August 2024 being less than 1%.

Bessent argued that Japan needed to adopt a tighter monetary policy to address imbalances created by its weak yen, which he stated was no longer effective due to Abenomics-era reflation policies.

The strengthening of the Japanese yen may cause investors who borrowed in low-yield yen and invested in high-yield currencies to reassess their positions, potentially creating selling pressure on Bitcoin and other risky assets.