Bitcoin’s Growing Connection to Japan’s Long-Term Bonds Signals a Major Shift in Global Markets

Weston Nakamura, founder of Across The Spread and a respected analyst of global macro trends with an Asian focus, highlights an intriguing new dynamic shaping financial markets worldwide.

Nakamura observes that Bitcoin (BTC) is increasingly tracking the yield movements of Japan’s long-term government bonds—specifically the 30-year JGB—more closely than it is following traditional U.S. equity benchmarks like the Nasdaq 100.

While Bitcoin’s price has deviated from conventional risk assets, its fluctuations have started to closely reflect the recent surge in Japanese bond yields, both reaching unprecedented levels in recent months.

Notable moments during 2024—such as the debut of U.S.-listed spot Bitcoin ETFs and the re-election of Donald Trump—caused brief Bitcoin price spikes driven by market sentiment. However, Nakamura notes that Bitcoin’s overall trajectory realigned with the trend in long-term JGB yields.

He explains that this relationship is not simply a ripple effect from U.S. Treasury yields, but a direct result of Japan’s unique bond market environment. Supporting this view, Nakamura points to comments by U.S. Treasury official Scott Bessent, who credits global forces—particularly Japan—for driving U.S. Treasury yield movements rather than domestic U.S. political issues.

This leads to the compelling implication that if U.S. monetary policy is largely influenced by the 10-year Treasury yield, and that yield is heavily shaped by Japanese government bonds, then Japan may be exerting a subtle yet significant influence on U.S. economic policy.

Nakamura suggests that the Japanese bond market now occupies a central role in the global financial system, affecting a wide range of assets from cryptocurrencies and stocks to currencies and precious metals. He recommends that investors across all asset classes monitor developments in Japan closely, as its bond market’s impact on global markets appears to be growing substantially.