Bank of Japan Eyes Rate Hike Amid Yen Weakness

The Bank of Japan signals potential rate hikes this December amid yen weakening and rising inflation, with key discussions involving Governor Kazuo Ueda, following economist Alicia Garcia Herrero’s analysis.

The potential rate hike could impact Bitcoin by strengthening the yen, influencing the yen carry trade and risk asset liquidity, reflected in market forecasts.

Bank of Japan Considers 0.75% Rate Hike

The Bank of Japan, led by Governor Kazuo Ueda, is considering raising interest rates at a meeting scheduled for December 18–19, 2025. This potential policy shift is driven by the yen’s persistent weakness, which is influencing discussions within top government and economic circles in Japan. Summary of Monetary Policy Meetings

Under the leadership of Kazuo Ueda, the Bank of Japan is evaluating a rate hike as a measure to combat inflationary pressures exacerbated by the yen’s depreciation. This potential move marks a significant shift in Japan’s monetary policy dynamics, with inflation expectations continuing above the 2% target.

Bitcoin Faces Pressure from Monetary Policy Shift

Did you know? Previous Bank of Japan rate hikes have preceded dips in Bitcoin’s price, with BTC historically experiencing 5-10% corrections during similar monetary policy adjustments.

According to CoinMarketCap, Bitcoin (BTC) currently trades at $87,528.81 with a market cap of $1.75 trillion. BTC dominance stands at 58.69%, with a 24-hour trading volume of $40.51 billion, reflecting a decline of 6.66%. Price movements over 90 days show a decline of 25.46%, highlighting volatility.

Coincu’s research team indicates that a rate increase may tighten liquidity, further straining Bitcoin’s price stability. Regulatory adjustments might emerge if market reactions persist, affecting trading and valuation metrics globally, drawing from past trends and expert analysis within the sector.