BOJ rate decision could unsettle markets as yen shorts near nine-year high

Bitcoin traders often focus on Fed meetings, but this week attention has shifted to Tokyo. The Bank of Japan is widely expected to raise its benchmark rate to 1% from 0.75% on Tuesday, taking it to its highest level since 1995. Data tracked by the Commodity Futures Trading Commission showed leveraged funds had built speculative short positions in the yen to more than 115,000 contracts in the week ended June 9, the highest level since November 2017.

Those bets that the yen will weaken could be unwound if the BOJ signals further tightening, pushing the yen higher and disrupting yen-funded carry trades that involve borrowing in yen to invest in higher-yielding, risk-on assets. Carry trades have helped fuel bull markets on Wall Street and in government bonds, and some analysts say they have supported crypto as well.

Japan, Tokyo

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