Japan’s Bond Yield Surge Rattles Global Markets, Threatens Crypto Rally
Japan’s 10-year government bond yields spiked to 1.86% on Monday, marking the highest level since April 2008. The surge threatens the yen carry trade—a cornerstone of global liquidity that has fueled investments in risk assets like cryptocurrencies.
The Bank of Japan’s looming policy decision on December 18-19 adds uncertainty. Governor Kazuo Ueda’s cryptic pledge to make an 'appropriate decision' on rate hikes sent tremors through markets already grappling with Japan’s $1.1 trillion Treasury holdings—the largest foreign position in US debt.
Crypto markets tumbled Sunday as traders priced in the Ripple effects. The selloff reflects how Japanese monetary policy remains a hidden driver of digital asset volatility, with yields now nearly double their 2024 lows.
