Japanese yields test Bitcoin rebound above $64K

• Bitcoin (CRYPTO:BTC) rebounded about 8% to above US$64,000, but rising Japanese bond yields may pressure further gains.
• Japan's 10-year government bond yield reached a 30-year high of 2.85%, lifting global borrowing costs.
• Investors are balancing higher bond yields against expectations of lower U.S. interest rates and continued demand for risk assets.

Bitcoin (CRYPTO:BTC) rebounded more than 8% to above US$64,000, but the recovery is facing pressure as Japan's 10-year government bond yield climbed to a 30-year high of 2.85%.

The rise in Japanese yields has pushed borrowing costs higher across major markets, with the U.S. 10-year Treasury yield nearing 4.5%, Germany's 10-year bund approaching 3%, and the U.K. 10-year gilt trading around 4.8%.

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Higher government bond yields can reduce demand for Bitcoin because fixed-income investments become more attractive, although the cryptocurrency recently benefited from lower expectations for future U.S. interest rate increases following weaker economic data.

Bitcoin continued trading near US$64,000, while Goldman Sachs said it still expects the Japanese yen to weaken and continues to favour yen-funded carry trades, and there was no immediate market reaction beyond normal price movements.

Bitcoin's recent rally followed comments from Federal Reserve Governor Kevin Warsh that inflation risks had eased and weaker-than-expected U.S. June employment data, including a labour force participation rate of 61.5%.

Investors are now monitoring whether rising global bond yields outweigh expectations of lower U.S. interest rates, as both factors are expected to influence demand for Bitcoin and other risk assets in the near term.

At the time of reporting, Bitcoin price was $63,067.14.