BOJ raises rates 25bp as Bitcoin tops $77K

• The Bank of Japan has raised its policy rate by 25 basis points to 1.25%, its highest level in 31 years.
• Bitcoin has climbed to $77,400, while the yen has weakened against the US dollar following the decision.
• The rate move has kept yen-funded carry trades in focus, as higher Japanese borrowing costs can affect global risk markets.

The Bank of Japan has raised its benchmark interest rate by 25 basis points to 1.25%, citing inflation risks from higher import and energy costs.

Bitcoin (CRYPTO:BTC) has climbed from an overnight low of $76,200 to $77,400, while BTC/JPY has gained 0.5% to JPY 12.06 million on bitFlyer.

The Japanese yen has weakened following the decision, with USD/JPY rising to 156.70 from 156.20.

The rate increase has marked the BOJ’s second hike in three months as policymakers have responded to persistent inflation and a weak yen.

Japan’s low interest rates have supported yen-funded carry trades, where traders borrow yen to invest in higher-yielding assets overseas.

The latest increase has left Japan’s rates well below US rates, maintaining a significant yield gap despite tighter Japanese monetary policy.

The Bank of Japan’s decision has followed the Federal Reserve’s 25-basis-point rate increase, which has taken the US target range to 3.75%-4%.

At the time of reporting, Bitcoin price was $77,304.28.