BoJ Raises Rate to 30-Year High; Bitcoin Near $66,000

The Bank of Japan’s policy board voted 7-1 to raise its benchmark interest rate by 25 basis points to about 1%, effective June 17, the highest level since 1995. Officials said rising oil costs could push inflation above the central bank’s 2% target and indicated further increases may be possible.

Policymakers reported Japan’s economy has “recovered moderately” on the back of stronger corporate profits and a firmer jobs market, while noting risks from the Middle East and higher energy costs. The BoJ paired the quarter-point increase with a commitment to boost bond purchases if long-term yields spike. It also outlined plans to trim regular bond purchases by about ¥200 billion each quarter until early 2027, then hold purchases near ¥2 trillion.

Cryptocurrency markets showed limited movement after the rate decision. Bitcoin traded around $66,000, down roughly 1.1% on the day, and total crypto market capitalization stood near $2.34 trillion, down about 1.4%. Open interest in Bitcoin futures fell compared with the prior day, suggesting traders reduced leveraged positions.

Earlier reports of a U.S.-Iran ceasefire had lifted risk assets and pushed Bitcoin above $65,000 from the low $60,000s; a formal signing was expected later in the week. Market participants said that rally dulled the immediate impact of the BoJ decision.

The yen has strengthened roughly 10% against the U.S. dollar over the past month, bringing the yen carry trade back into focus. Ryan Yoon, senior analyst at Tiger Research, observed: “The yen carry trade has failed to trigger any meaningful disruption in either crypto or global equities this time around.” Maksim Balashevich, founder and CEO of Santiment, noted the rate rise had been largely priced into markets beforehand and that only unexpected events are likely to move prices significantly.

Traders on the prediction market Myriad assigned a 64% probability that Bitcoin’s next significant move would take it to $55,000.

In the financial sector, Japan’s three largest banks-MUFG Bank, Mizuho Bank and Sumitomo Mitsui Banking Corporation-have formed a council to design an operational framework for a joint stablecoin. The banks aim for issuance by March 2027 and are targeting a potential launch in fiscal 2026, planning to issue the coin under a trust arrangement with the three institutions as joint settlors.

Japan’s public debt exceeds 200% of GDP. The BoJ said it would manage bond purchases to limit abrupt tightening of financial conditions as it adjusts policy to address rising inflationary pressure.