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Japan’s government bond yields have hit record highs, with the 30-year yield rising to 3.38% this week, a level not seen since the 1990s. At first, the number looks small, but it can shake global money flow in a big way.
With the crypto market already weak, many fear this move from Japan could trigger another crypto crash.
What’s causing Japan’s 30-Year Bond to Hit 3.38%
Japan’s long-term bond yields are jumping because the Bank of Japan is slowly moving away from its long-time ultra-easy money policy. At the same time, the government is preparing a huge support package worth 17–20 trillion yen to help a weakening economy.
But instead of calming the market, this move pushed bond yields even higher. The 30-year bond climbed to 3.38%, while the 20-year rose to 2.88%, showing rising worry among investors.
As yields rise at home, many big investors are now closing old trades where they used to borrow cheaply in Japan and invest overseas. With higher returns now available in Japanese bonds, money is flowing back into Japan.
Why Rising Japanese Yields Create Global Trouble
For many years, Japan kept its interest rates close to zero. Because of this, big Japanese banks and pension funds sent huge amounts of money to other countries, like the U.S., to earn better returns.
But now, that advantage is gone.
Japan’s long-term yields are rising, and this pushes other countries’ borrowing costs up too. When borrowing gets expensive, growth slows, and markets get shaky.
What Could This Mean for the Crypto Market?
Japan’s jump in bond yields puts the huge ¥20 trillion “yen carry trade” at risk. This trade worked because money was borrowed cheaply in yen and invested in risk assets around the world, including crypto.
We’ve seen this in the past, whenever Japan’s long yields jumped, like in 2015, 2018, and 2022, crypto prices also fell because global money became tighter. The same thing is happening now.
Right now, the crypto market is already under pressure. It has lost hundreds of billions in the last few weeks. Meanwhile, Bitcoin has fallen from above $126,000 to around $92,000 as global rates keep jumping.
If Japan’s next bond sale goes badly and yields jump again, even more investors may pull money out of risky assets, and crypto could fall further.
