BOJ Rate Hike: Why Could This Be More Dangerous Than the Fed? BTC Beware of a Second Liquidation Wave
This week, global financial markets are facing a rare “central-bank chain reaction.” The Federal Reserve has just raised interest rates by 25 basis points, lifting the federal funds target range to 3.75%–4.00%. Attention is now immediately shifting to the Bank of Japan. The BOJ will hold its monetary policy meeting from September 17 to 18, and the market broadly expects it to raise its policy rate from 1.00% to 1.25%, marking the highest level in roughly 31 years. Here is the big question: If the Feds rate hike is already painful enough for BTC, why could a BOJ rate hike pose an even greater risk? The answer may lie in a term that many crypto investors are unfamiliar with — the Japanese yen Carry Trade.1. Fed Rate Hikes Target “Dollar Liquidity” The logic behind a Fed rate hike is relatively straightforward: Higher interest rates → higher returns on dollar-denominated assets → cash and U.S. Treasuries become more attractive → valuations of risk assets such as stocks and BTC come under pressure. Moreover, the market has already largely priced in this Fed rate hike. What really matters now is the forward guidance signaled by the new Fed Chair, Waller. If the market interprets this hike as merely a









