The Bank of Japan recently implemented a seemingly contradictory move—raising interest rates to 0.75%, hitting a 30-year high, yet the USD/JPY surged to 156.37, causing the yen to be pushed down and rubbed into the ground. What signals does this operation send to the global capital markets? And what does it mean for the crypto space? Let’s first clarify this matter.

On the surface, the rate hike was quite significant: a 25 basis point increase, enough to make people think that Japan’s monetary policy is tightening. But a closer look at BOJ Governor Ueda Kazuo’s statements reveals that the market’s reaction says it all—this is actually a carefully staged "performance-based rate hike."

He sent out three dovish signals, each one reassuring. First, the rate hike depends entirely on data performance, with no preset path for future increases, implying "after this hike, whether there will be another is still uncertain." Second, inflation is expected to fall back below the 2% target by the first half of 2026, meaning there’s no need to rush into further tightening. Lastly, the central bank remained silent on the timetable for the next rate hike, a typical one-off operational stance.

This is the core issue. Markets hate uncertainty, and the BOJ has directly brought this uncertainty to the forefront. The clear result: investors have understood that Japan’s rate hike cycle won’t last long, and borrowing costs remain ridiculously cheap. Plus, yen depreciation itself can reduce debt repayment pressure, establishing a key logic—that yen carry trades still have vitality.

For those paying attention to global capital flows, this signal is crucial. Cheap yen borrowing costs mean funds will continue to flow into high-yield assets, and the crypto market, as an important recipient, may continue to benefit from this wave of cross-border arbitrage.