Bank of Japan Expected to Raise Interest Rates to 0.75%

TLDR

• BOJ to raise interest rates to 0.75% on December 19, 2025.
• Bitcoin may drop to $74,000 due to rate hike impacts.
• Historical data shows Bitcoin drops after previous BOJ rate hikes.

The Bank of Japan (BOJ) is expected to raise its benchmark interest rate to 0.75% at the upcoming policy meeting on December 19, 2025. This adjustment marks a 30-year high and comes as Japan deals with a persistently weak yen and rising inflation, according to analyses from the Bank of Japan.

The potential impact on Bitcoin is being closely monitored, with predictions suggesting a significant drop in value. Analysts forecast that Bitcoin could fall to as low as $74,000. A similar decline of approximately 20-30% has occurred following past rate hikes by the BOJ.

Influential Changes in Japan’s Monetary Policy

Kazuo Ueda, Governor of the BOJ since April 2023, is at the forefront of this monetary policy shift. Under his leadership, Japan seeks to reverse decades of ultra-loose monetary strategies. Ueda’s past roles in the BOJ saw gradual shifts, giving insights into his current outlook on monetary normalization. Although there are no direct quotes from Ueda, his views are often described as hawkish by market analysts.

This policy change comes amidst a broader economic strategy by Prime Minister Sanae Takaichi’s administration. Recently, an 18.3 trillion yen spending package was announced, which has put additional pressure on Japan’s fiscal conditions. Japan’s position as the largest foreign holder of US debt also plays a significant role in the global liquidity landscape.

Implications for Bitcoin and Other Cryptocurrencies

Bitcoin appears particularly sensitive to Japan’s monetary policy changes due to the carry trade unwinds they provoke. These unwinds raise the cost of borrowing yen and typically lead institutional investors to sell riskier assets such as Bitcoin.

The potential for Bitcoin to drop to $74,000 is part of a broader risk-off movement affecting other cryptocurrencies like Ethereum (ETH), XRP, and ADA. These assets may experience pressure due to their correlation with Bitcoin and the liquidity drains expected from higher yen borrowing costs.

A Historical Context of BOJ Rate Hikes

There is a historical precedent for significant Bitcoin price drops following BOJ rate hikes. In past events, such as March 2024 and January 2025, Bitcoin’s value fell by approximately 23% and 30%, respectively. These patterns suggest a potential cascading effect in cryptocurrency markets driven by monetary policies in global economies like Japan.

Trader sentiment is predominantly bearish, as reflected by Polymarket odds showing a 98.5% chance of a rate hike. These statistics highlight the expectation that Bitcoin and related cryptocurrencies will face downward pressure during this period of monetary policy adjustment.

Community and Institutional Insights

While major figures in the cryptocurrency community have not explicitly commented on the upcoming BOJ meeting’s impact on Bitcoin, some analysts like CryptoNobler emphasize the recurring pattern of rate hikes leading to significant Bitcoin dumps. Speculative positions and broader market contingencies could play influential roles in the near future for Bitcoin investors. Visit Trade insights and analytics on TradingView.

No major updates have been made by crypto exchanges, institutional investors, or regulators specific to this BOJ policy meeting. The lack of official commentary has not minimized speculations, as the market remains on edge in anticipation of global shifts influenced by Japan’s monetary policy.

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