Crypto Markets Find Footing as Japan Bond Volatility Eases

Crypto markets remain tightly linked to moves in global bond yields, and while conditions have steadied for now, any renewed rise in rates could quickly weigh on bitcoin and other digital assets.

Major cryptocurrencies stabilized on Thursday as Japanese government bonds rebounded for a second straight session, easing a key source of macro stress that had pressured bitcoin and the broader crypto market earlier in the week.

Bitcoin traded near the $90,000 level during Asian hours after sharp swings over the past day, while ether climbed back above $3,000. Other large tokens, including Solana, XRP and Cardano, also steadied after suffering steep losses earlier in the week, according to CoinGecko data.

The calmer price action followed a recovery in longer-dated Japanese government bonds, which pushed yields lower. Yields on 30-year Japanese debt fell sharply after government officials called for restraint, reversing part of a recent surge that had driven borrowing costs to multi-decade highs.

The renewed stability in Japanese bonds does not point to a return of risk appetite, but it has removed one immediate pressure point that had forced traders into defensive positioning earlier in the week.

Japan’s bond market came under heavy pressure at the start of the week, unsettling global markets, including cryptocurrencies. The selloff also lifted bond yields worldwide, including U.S. Treasury yields, which underpin global financial conditions.

Movements in Japanese yields matter for crypto because the country’s debt market sits at the center of global capital flows. When long-dated Japanese yields rise sharply, global borrowing costs tend to increase, encouraging investors to shift capital into safer, interest-bearing assets.

That rotation typically weighs on speculative markets such as crypto, which depend on loose financial conditions and abundant liquidity. Bitcoin briefly slipped below $88,000 as traders reduced exposure, while altcoins fell more sharply as leverage was flushed from the system.

For now, easing stress in Japan’s bond market has helped digital assets regain stability. Still, the episode highlights how vulnerable crypto remains to renewed volatility in global interest rates.