Bitcoin tops $77K as BOJ raises rates to 31-year high

Bitcoin ↗ 6.45% held above $77,000 on Friday after the Bank of Japan raised its benchmark interest rate by 25 basis points to 1.25%, the highest level since 1995. Markets reacted calmly to the widely anticipated move, with the yen weakening rather than strengthening — easing fears of a disorderly unwind of yen-funded carry trades that could have pressured risk assets including crypto.

BOJ Accelerates Tightening Cycle

The BOJ's Policy Board voted 7–2 at its two-day meeting ending September 18 to lift the rate from 1.0%, with board members Toichiro Asada and Ayano Sato dissenting. Reuters reported that Governor Kazuo Ueda signaled the central bank has entered a new phase focused on preventing inflation from overshooting its 2% target, opening the door to further hikes. The move marked the second increase in three months, accelerating a tightening cycle that has seen six rate hikes since the BOJ ended a decade of negative rates in 2024.fxstreet+2

Japan's core consumer inflation stood at 1.7% year-over-year in August, while a weaker yen and elevated energy costs continue to exert upward pressure on prices. The decision came days after the Federal Reserve also raised its benchmark rate by 25 basis points to 3.75%–4.00%, keeping the U.S.–Japan rate gap at roughly 2.5 to 2.75 percentage points.ijr+1

Yen Weakens, Carry Trade Fears Fade

Despite the rate hike, the Japanese yen depreciated against the dollar, with USD/JPY rising from around 156.20 before the announcement to approximately 156.70 afterward. CoinDesk reported that traders interpreted the two dissenting votes and the absence of aggressive forward guidance as signs the BOJ may take a measured approach to further tightening.coindesk

The muted yen reaction meant the carry-trade risk that rattled global markets in August 2024 — when a surprise BOJ move triggered sharp selloffs across equities and crypto — did not repeat. Bitcoin's dollar-denominated price held largely steady around $77,000, while the BTC/JPY pair on Tokyo-based bitFlyer rose about 0.5% to 12.06 million yen.crypto+1

ETF Inflows Support Bitcoin

Institutional flows added a tailwind ahead of the BOJ decision. U.S. spot Bitcoin ETFs recorded $159.5 million in net inflows on September 17, reversing two consecutive sessions of withdrawals, according to SoSoValue data cited by crypto.news. BlackRock's ↗ 1.50% iShares Bitcoin Trust led with $183.7 million in inflows, though outflows from Fidelity's FBTC and VanEck's HODL partially offset the total.crypto

Goldman Sachs ↘ 1.00% and Bank of America ↘ 0.77% expect the Federal Reserve to raise rates again in October, according to Reuters, while most major brokerages anticipate another increase later in 2026.crypto