Bitcoin Dips Below $87,500 as Japanese Yields Hit 17-Year Highs
Bitcoin slipped below $87,500 during Hong Kong morning trading as Japan’s short-term government bond yields surged to levels not seen since 2008, sparking risk-off sentiment across regional markets.
Japan’s 2-year government bond yield briefly touched 1.01%, fueled by speculation that the Bank of Japan could finally end its long-standing near-zero interest rate policy. BOJ Governor Kazuo Ueda recently noted the board will assess whether a rate hike is warranted at this month’s meeting.
The yen strengthened in Tokyo, prompting an unwind of yen-funded carry trades that had bolstered risk assets throughout the year. Crypto markets, highly sensitive to short-term liquidity flows in Asia, bore the brunt of the move. Bitcoin’s slide triggered more than $150 million in long liquidations, while Ether fell toward $2,850, with roughly $140 million in long positions liquidated.
Polymarket data shows traders now price the chance of a December BOJ rate hike at around 50%, up seven percentage points from previous estimates, highlighting mounting uncertainty over Japan’s policy path.
Market Snapshot:
- Crypto: Rising Japanese yields and a stronger yen could continue to pressure leveraged positions, adding volatility to Bitcoin and Ether.
- Gold: Goldman Sachs reports nearly 70% of institutional investors expect gold to keep climbing, with many forecasting prices above $5,000 by 2026.
- Equities: Asia-Pacific markets slipped Monday. Japan’s Nikkei 225 fell 1.3% as traders awaited China’s manufacturing data and priced in an 87% probability of a Fed rate cut.
Investors will closely watch BOJ signals and yen movements this week, as further tightening cues could trigger another round of volatility across crypto and regional markets.
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