Yen Carry Trade Survives BoJ Rate Hike, Crypto Market Remains Unfazed

The Bank of Japan raised its key rate by 25 basis points to 1.25 percent on September 18, 2026, its highest level in 31 years.

Two days earlier, the US Federal Reserve had lifted its target range by the same amount to 3.75 to 4.00 percent.

The crypto market remained unaffected, with Bitcoin at $80,978 and Ether at $2,613, both up around 5-6% from the previous day.

A rate move by the Bank of Japan is only a concern for crypto investors if it triggers an unwind of yen-funded positions.

This time, however, the yen did not appreciate, and instead weakened against the US dollar, despite the textbook suggesting otherwise.

The reason lies in the two dissenting votes on the policy board, which suggests a slower pace of rate increases and keeps the carry trade attractive.