# BOJRateHikesBackontheTable

BOJ Rate Hikes, Yen Liquidity, and Crypto Risk Allocation: A Deep Dive
The Bank of Japan (BOJ) has long been a central pillar of global liquidity dynamics due to its decades-long ultra-loose monetary policy. Near-zero and negative rates, along with yield curve control, have created a unique environment where the yen has functioned as the go-to funding currency for leveraged global carry trades. Investors have borrowed yen at minimal cost to deploy capital into higher-yielding markets, including equities, commodities, and increasingly, crypto. In this sense, the BOJ’s policies have indirectly f

As markets enter the holiday season, liquidity is thinning and volatility is rising and while most attention is on U.S. monetary policy and political developments, there’s another story quietly shaping global risk conditions: Japan. JPMorgan now expects the Bank of Japan to hike rates twice in 2025, potentially pushing policy rates toward 1.25% by the end of 2026. At first glance, these moves may seem modest, but for a market that has relied on decades of ultra-loose monetary policy, even incremental shifts have outsized consequences.
For years, the yen has been the preferred funding currency