BOJ Interest Rate Decision June 16 Could Trigger Yen Carry Trade Unwind, Threatening Bitcoin

BTC1.36%
According to analyst Omkar Godbole, the Bank of Japan's interest rate decision on June 16 could trigger significant volatility for Bitcoin through a potential yen carry trade unwind. The BOJ is expected to raise its benchmark rate to between 0.75% and 1%, the highest level since 1995, which could prompt liquidation of yen short positions. As of June 9, leveraged funds held over 115,000 short contracts in the yen, reaching the highest level since November 2017. If the BOJ signals further tightening, these positions could unravel, strengthening the yen and triggering sell-offs in riskier assets including crypto. Godbole noted the situation mirrors July 31, 2024, when a similar interest rate hike led to yen short position squeezes and a sharp BTC decline from approximately $65,000 to $50,000 within a week.
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