According to Mihir (@RhythmicAnalyst) on Twitter, the Bank of Japan currently holds 53% of all Japanese government bonds and 35% of stock ETFs, marking an unprecedented level of central bank intervention in financial markets. This concentration exposes the Japanese capital market to heightened risk, particularly as inflation rates have climbed rapidly in recent months. For traders, this signals potential volatility in Japanese equities and fixed income markets, with possible spillover effects on global risk appetite and cryptocurrency markets, especially Bitcoin and stablecoins often used as risk hedges. Source: Mihir (@RhythmicAnalyst), Twitter, May 30, 2025.

According to The Kobeissi Letter, Japan's 40-year government bond yield has risen sharply from approximately 1.3% two years ago to 3.5% as of May 2025. This significant increase in yields reflects surging inflation and a declining Japanese economy, signaling the onset of a recession (source: The Kobeissi Letter on Twitter, May 25, 2025). For cryptocurrency traders, this shift in Japan's macroeconomic environment may drive increased demand for alternative assets such as Bitcoin and stablecoins, as investors seek to hedge against sovereign risk and currency devaluation. The volatility in Japanese bond markets is likely to increase capital flows into digital assets, with traders watching for further policy responses from the Bank of Japan.

According to The Kobeissi Letter, Japan’s 30-year government bond yield has surged to a historic high of 3.15%, marking a dramatic shift from the country’s decades-long era of low rates. This spike, driven by persistent inflation and a changing policy outlook, signals a tightening liquidity environment in global markets. Crypto traders should monitor this development closely, as rising yields in major economies often prompt capital outflows from risk assets, including cryptocurrencies, in search of safer returns. The trend could increase volatility in Bitcoin and altcoin markets as global investors reassess risk exposure. (Source: The Kobeissi Letter, May 20, 2025)