BOJ Decision Sparks Fears of Yen Carry Trade Unwind Impacting Crypto Markets

The Bank of Japan (BOJ) held its short-term policy rate at 0.75%, but the decision was marked by a significant internal divide among board members. The hawkish split, paired with an upward revision to the inflation forecast for fiscal 2026 to 2.8% from 1.9%, has revived expectations of a June rate increase.

This development has renewed fears of a yen carry trade unwind, which has previously had a negative impact on crypto markets. The reaction in Bitcoin was swift, with prices dropping below the $76,200 threshold after opening at $77,371 on Tuesday.