Bitcoin Defies Expectations as Yen Carry Trade Unwinds

The yen carry trade has been unwinding for months, and this time around, it's not affecting Bitcoin's price. The carry trade was one of the factors that weakened BTC at the end of last year, but despite increasing yields on Japanese bonds, BTC is recovering.

Yields on Japanese bonds have continued to rise, removing the decades-long carry trade that relied on cheap yen credit. As of August 2026, BTC was trying to defend $77,000, seemingly unaffected by any news of rising yields in Japan.

The recent rate hikes are more orderly compared to earlier increases, giving time for funds to adjust. The predictable raises and signals from the Bank of Japan mean there are no short-term liquidations, and traders can adjust their positions.