Rewritten Version:

A sharp rise in Japanese bond yields is starting to pressure Bitcoin, which had recently climbed about 8% in under a week as expectations around global interest rates shifted.

Japan’s 10-year government bond yield has surged to a 30-year high of 2.85%, up 18 basis points this month, driving borrowing costs higher across major developed markets.

In the U.S., the 10-year Treasury yield is nearing 4.5%, while Germany’s 10-year bund is closing in on 3% and the U.K.’s 10-year gilt is around 4.8%. Inflation-adjusted yields are also rising, signaling tighter financial conditions worldwide.

For years, Japan’s ultra-easy monetary policy—characterized by near-zero rates and aggressive stimulus—helped keep global yields low. This supported carry trades, where investors borrowed yen cheaply to invest in higher-yielding assets abroad, effectively suppressing borrowing costs across advanced economies.

That backdrop is shifting, and it matters for bitcoin. Higher bond yields increase the opportunity cost of holding non-yielding assets like BTC, making fixed-income investments more attractive by comparison.

The recent jump in yields could offset the positive momentum bitcoin gained earlier this month, when markets scaled back expectations for additional U.S. rate hikes.

That shift was triggered on July 1, when Federal Reserve Chair Kevin Warsh indicated inflation risks were easing, followed by a weaker-than-expected U.S. jobs report showing slower hiring and a drop in labor force participation to a more than five-year low of 61.5%.

Bitcoin found support near $58,000 at the start of the month and rallied toward $64,000 on the back of those developments. However, the renewed rise in global yields—led by Japan—may cap further gains.

Still, some analysts remain optimistic. Goldman Sachs expects the yen to continue weakening and continues to favor carry trades funded in the Japanese currency.