BTC Faces Selling Pressure Amid Surging Japanese Bond Yields and Yen Depreciation

Bitcoin is coming under renewed pressure as Japanese government bond (JGB) yields surge to multi-decade highs and the yen weakens sharply, dampening risk appetite across global markets.

The move marks a sharp reversal from just days earlier, when Bitcoin set record highs in both U.S. dollar and yen terms, lifted by optimism over Prime Minister Takaichi Sanae’s support for Abenomics-style fiscal expansion.

However, those same policies now appear to be unsettling bond markets. Abenomics emphasizes large-scale government spending and loose monetary conditions—both of which increase debt issuance and strain fiscal outlooks.

Yields on Japan’s 10-year government bonds climbed to 1.70% early Wednesday, the highest level since July 2008, according to TradingEconomics. The 30-year yield briefly touched 3.34% before settling at 3.16%. The 10-year yield alone has risen 13 basis points in a week and 76 basis points over the past year.

Rising yields tend to pressure risk assets by raising borrowing costs and encouraging investors to move toward safer fixed-income instruments. Although Bitcoin is often viewed as “digital gold,” price data show it continues to trade in tandem with high-growth equities, particularly tech stocks.

Global strategists are increasingly concerned about contagion from Japan’s bond market. Goldman Sachs warned that volatility in JGBs could spill over into global fixed-income markets, noting that each 10-basis-point move in JGBs may add 2–3 basis points of upward pressure on U.S., German, and U.K. yields, Bloomberg reported.

Yen Slide Strengthens Dollar, Tightens Conditions

Meanwhile, the U.S. dollar index (DXY) has hit a two-month high, driven largely by the yen’s 3.5% decline against the dollar since Friday. The yen’s weakness reflects expectations that the Bank of Japan will maintain ultra-loose monetary policy in line with Sanae’s fiscal stance.

A stronger dollar typically tightens global liquidity and curbs gains in Bitcoin, gold, and other dollar-denominated assets.

While Bitcoin’s advance has paused, gold has continued its ascent, surging past $4,000 an ounce as investors seek shelter from currency volatility and rising yields.

The spike in JGB yields highlights a shifting macro landscape—one that may weigh on Bitcoin and other risk assets as global markets adjust to higher borrowing costs and a stronger dollar.