The Japanese Yen Rate Hike May Not Trigger Risk-Off Sentiment in the Crypto Market

According to reports from Ha Shilian, analysts believe that the upcoming rate hike of the Japanese yen may not lead to risk-off sentiment in the cryptocurrency market. Previously, a rate increase by the Bank of Japan caused the yen to appreciate, intensifying risk-off sentiment and causing Bitcoin prices to drop from about $65,000 to $50,000. However, this upcoming yen rate hike is unlikely to have a similar impact for two reasons. First, investors are currently holding net long positions in yen, so they are unlikely to react quickly to the Bank of Japan's rate hike. Second, this year, Japanese government bond yields have continued to rise, with both short-term and long-term yield curves reaching multi-decade highs. Therefore, the upcoming rate hike reflects that official interest rates are catching up with market trends. Meanwhile, the Federal Reserve has lowered interest rates by 25 basis points while launching liquidity measures, reaching the lowest levels in three years. Overall, these factors suggest that there is a low likelihood of significant closing of yen arbitrage positions or year-end risk aversion.