Fed and BoJ Set Rates Next Week, and Bitcoin Is Watching

Markets are mostly expecting a hold, but the yen and the carry trade could make the BoJ decision more important for Bitcoin than the Fed.

Key Takeaways

• The Federal Reserve and the Bank of Japan will announce their rate decisions next week, while Bitcoin is trading around $64,000.
• Markets are mostly pricing in no change, though a smaller group in Washington is still expecting a rate hike.
• For Bitcoin, the yen is the bigger factor, since a stronger yen or higher Japanese rates could squeeze risky positions.

The Federal Reserve and the Bank of Japan are both scheduled to announce interest rate decisions next week, with just two days separating the meetings. Bitcoin is trading around $64,000 (€56,300), and in both cases the market is leaning toward no change, even as a small group in Washington still sees room for a rate hike.

Fed Keeps the Market Guessing

The Fed has held its target range at 3.5% to 3.75% since December 2025. If policymakers leave rates unchanged again on Wednesday, it would mark a fifth straight hold. Even so, expectations moved sharply earlier this month: CME FedWatch showed the odds of a July hike at about 38% on July 23, up from 12% a week earlier. Since then, that probability has slipped back to 34.2%.

The shift came as oil prices climbed. Brent closed above $100 (€88) per barrel on July 23 for the first time since May. At the same time, June inflation offered some temporary relief, with monthly prices down 0.4% and annual inflation easing to 3.5% from 4.2%. That picture could change again in July if higher oil prices and geopolitical tensions start feeding into the data, which will be released on August 12.

The Yen Still Matters More for Bitcoin

For Bitcoin, the Bank of Japan may matter even more than the Fed. Nikkei reported that the BoJ is likely to keep its policy rate at 1% on July 31, but the bigger focus is the yen. Last week, the currency weakened past 163 per dollar, its lowest level in four decades, prompting Finance Minister Satsuki Katayama to say the government is ready to intervene if necessary.

That matters because Japanese rates and the yen carry trade are closely linked to crypto. If borrowing in yen becomes more expensive, or if the yen strengthens quickly, the funding behind risky positions can come under pressure. Bitcoin is often the first asset to get sold because it trades around the clock and can be liquidated quickly. The same dynamic also helped drive the recent Bitcoin move around the weak yen.

Why European Readers Are Watching

For European crypto investors, this is really a broader macro story, not just a U.S. rates story. Higher U.S. rates can make risk assets less appealing, while a stronger yen can tighten global liquidity. That makes the Fed decision and the BoJ meeting relevant for anyone who uses Bitcoin as a read on overall market risk.