Bitcoin Holds Steady as Bank of Japan Keeps Rates at 1%

The BOJ held rates at 1% and let the yen weaken again, while traders watched for any impact on the carry trade and Bitcoin.

Key Takeaways

• Bitcoin traded near $63,900 on Friday and barely reacted after the Bank of Japan’s policy decision.
• The Bank of Japan left its benchmark rate at 1%, while Governor Kazuo Ueda signaled inflation could rise later this fiscal year.
• Ether was around $1,885, and BNB climbed 3.5% on the day to roughly $591.

Bitcoin hovered around $63,900 (€55,700) on Friday and showed little reaction after the Bank of Japan kept its policy rate at 1%. Governor Kazuo Ueda struck a slightly more hawkish tone, but the decision itself was largely in line with expectations. The yen weakened again during his press conference, even as traders were already pricing in a strong chance of a rate hike in October.

The Yen Remains a Macro Factor

Ueda said inflation is expected to move above 2% later this fiscal year and pointed to AI demand and a weaker yen as reasons prices could keep rising. That matters for crypto traders because the yen carry trade, where investors borrow cheaply in yen and rotate into higher-yielding assets, has long been part of the broader risk-asset backdrop.

The Bank of Japan has kept rates low for years in an effort to fight deflation and support growth. That makes any change in the policy path especially important for markets that depend on liquidity and risk appetite, including crypto.

Bitcoin Tracks the Yen

The relationship between Bitcoin and the dollar-yen exchange rate has become more visible again over the past few weeks. Recent market data shows a strong negative correlation between Bitcoin and USD/JPY, which means the two often move in opposite directions.

That lines up with the idea that a weaker yen and the carry trade can channel money into riskier assets. In August 2024, the BOJ raised rates for the first time in 17 years, from -0.1% to a range of 0% to 0.1%, but this latest move shows the central bank is still moving cautiously.

Calm in the Crypto Market

The wider crypto market was quiet as well. Ether traded around $1,885 (€1,640), while BNB stood out with a 3.5% gain on the day and a 4.4% gain over the week to about $591 (€515), according to CoinDesk data.

For European crypto readers, the main point is that policy moves in Japan still matter for digital assets. If the yen stays under pressure and rate expectations keep shifting, that could influence how much risk flows into Bitcoin and other major tokens, even though the broader market backdrop will still set the tone.

The yen’s latest move also fits with earlier stress around Japan’s rate outlook. In a recent analysis of the Fed and BoJ, we already flagged the risk that a stronger yen or tighter BOJ policy could disrupt the carry trade and weigh on crypto.