Bank of Japan to Raise Rates for the First Time in 30 Years: How Will This Impact Bitcoin?

The Bank of Japan is raising its policy rate to 0.75%, the first hike in three decades.

Bitcoin has shown consistent declines aligned with Japan’s rate hikes, with a predicted 7% drop by December 2025.

Bitcoin’s current market trend shows a 0.78% decline, reflecting global economic and monetary policy shifts.

The Bank of Japan is set to raise its policy interest rate to 0.75% at its upcoming meeting, scheduled for December 18-19. This rate increase will be the first since January 2025, marking a significant shift in Japan’s monetary policy. The move is expected to raise borrowing costs to their highest level in three decades.

Rate Hike Proposal Supported by Majority

Governor Kazuo Ueda, along with the Bank of Japan’s executive team, has suggested increasing the rate by 25 basis points, which would result in a shift from the current 0.5% level. The proposal would be approved by the majority of the nine-member Policy Board in the upcoming meeting. This decision was made at a time of increasing Japanese government bond yields.

The 10-year government bond yield has shot up to 1.94%, which has not been so high since mid-2007. Moreover, the government of Prime Minister Sanae Takaichi has been increasingly making its support for the tight monetary policy more evident as the inflationary pressures continue to mount. The increase in the interest rate indicates that the Bank of Japan has decided to change its way of handling economic problems and is now more in tune with the global financial conditions.

Bitcoin’s Declines Aligned with Japan Rate Hikes

The expected policy interest rate has raised concern in the crypto market as many anticipate a reaction. Historically, the expected rise has impacted the cryptocurrency market, particularly Bitcoin. The observation tracks Bitcoin’s performance against the U.S. Dollar from March 2024 to December 2025. It reveals significant price drops corresponding to the Bank of Japan’s rate hikes. Notably, the chart shows a -27% decrease in Bitcoin’s value by March 2024 and a -30% drop by July 2024. Another substantial decline occurred in January 2025, with a -30% reduction.

Source: X

The rate hikes in Japan are marked on the graph, and the first big drop matches up perfectly with the hike. The rate hikes have always happened during the market drops of Bitcoin, which is seen as the currency being very much influenced by the liquidity changes in Japan. Another rate hike is anticipated on December 19, 2025, and the market is very much alert to its possible effect on Bitcoin. As the latest data suggests, Bitcoin is going to drop around 7% by December 2025.

Bitcoin Current Market Action Revealed

Tracking the ongoing Bitcoin price trend at the time of press, CoinMarketCap data reveals that initially, the price rose slightly, reaching a peak of $90.45K. Following this, the price experienced a downward trend, dropping steadily to $89.86K. The price decrease was accompanied by a declining trading volume, which fell by 15.46% within 24 hours.

Source: CoinMarketCap

The market cap of Bitcoin reads at $1.79 trillion, and the daily trading volume amounts to $69.03 billion. The price action signals a correction after a stretch of limited upward movement before a sudden pullback. In the last 24 hours, the value of Bitcoin went down by 0.78%. This indicates that the market was responding to some external forces that were affecting the price of Bitcoin, for the crypto had trouble getting past the $90K level.