“Bitcoin Slides in Asia as Japan Bonds Jump and BOJ Hike Bets Rise”

Bitcoin Drops Below $87,500 as Japanese Yields Surge to 17-Year Highs

Bitcoin fell below $87,500 during Hong Kong morning trading as Japan’s short-term government bond yields hit their highest levels since 2008, sparking a wave of risk-off selling across regional markets.

Japan’s 2-year government bond yield briefly reached 1.01%, fueled by speculation that the Bank of Japan may finally end its long-standing near-zero interest rate policy. BOJ Governor Kazuo Ueda recently said the board will consider whether a rate hike is warranted at this month’s meeting.

The yen strengthened in Tokyo, triggering the unwinding of yen-funded carry trades that had supported risk assets throughout the year. Crypto markets, highly sensitive to short-term liquidity in Asia, were hit hardest. Bitcoin’s drop sparked more than $150 million in long liquidations, while ether slipped toward $2,850, seeing around $140 million in liquidated longs.

Polymarket data shows traders now price the chances of a December BOJ rate hike at roughly 50%, up seven percentage points from earlier estimates, reflecting growing uncertainty over Japan’s monetary policy.

Market Implications:

Crypto: Rising Japanese yields and a stronger yen could continue to pressure leveraged positions, adding volatility to Bitcoin and Ether in the short term.
Gold: Goldman Sachs notes that nearly 70% of institutional investors expect gold to keep rising, with many forecasting prices above $5,000 by 2026.
Equities: Asia-Pacific stocks slipped Monday, with Japan’s Nikkei 225 down 1.3% as traders awaited China’s manufacturing data and priced in an 87% chance of a Fed rate cut.

Traders will be watching BOJ signals and yen movements closely this week, as further tightening cues could trigger another round of volatility across regional markets and crypto assets.