#CryptoMarketRebound

Bank of Japan Governor (BOJ) Kazuo Ueda used his first public speech in 2026 to announce an important decision: the cycle of interest rate hikes by the central bank is far from over.
The comments came about two weeks after the Bank of Japan raised its benchmark rate to 0.75% on December 19, the highest level since 1995.
Most observers expect the next rate hike around mid-2026, although some analysts warn it could happen sooner if yen depreciation continues.
At noon in Tokyo, the yen was trading at about 157.15 per dollar, very close to the 160 threshold, which market participants believe could trigger government intervention.
Last summer, Japanese authorities sold about 100 billion dollars to defend the currency at similar levels. Last month, Deputy Finance Minister Atsushi Mimura warned that officials are prepared to take appropriate measures against excessive exchange rate fluctuations.
For cryptocurrency markets, the hawkish turn of the Bank of Japan provokes familiar concerns. Bitcoin fell by 20-31% after each of the last three BOJ rate hikes, as yen transactions unwind, pulling liquidity out of global risk assets.
The mechanism is simple: for decades, investors borrowed yen at near-zero rates to finance investments in high-yield assets worldwide, including cryptocurrencies. As Japan’s interest rates rise, such trading becomes less profitable, forcing liquidation of positions across all markets.
The crash in August 2024 served as a stark reminder of what could happen. When the Bank of Japan raised rates without a clear warning, the Nikkei dropped 12% in one day, along with Bitcoin.
So far, the cautious reaction of the yen to Ueda’s comments suggests that markets are waiting for action, not words. Currency trading remains in effect as long as yen weakness persists, and the difference in real interest rates favors the dollar — currently exceeding 3.5 percentage points.