Bitcoin Slides Below $87,500 as Japanese Yields Hit 17-Year Highs

Short-term Japanese government bond yields surged to levels not seen since 2008, strengthening the yen and pressuring leveraged crypto positions during Hong Kong trading hours.

Bitcoin fell below $87,500 in the morning session in Hong Kong, following a sharp rise in Japan’s 2-year government bond yield, which briefly touched 1.01%, marking the highest level in 17 years. The move reflects growing speculation that the Bank of Japan’s long-standing near-zero rate policy may be ending, following comments from BOJ Governor Kazuo Ueda that the board would evaluate whether a rate hike is appropriate at this month’s meeting.

The yen strengthened in Tokyo’s morning session, prompting an unwind of yen-funded carry trades that had supported risk assets throughout the year. Crypto markets, particularly sensitive to short-term liquidity flows in Asia, bore the brunt of the selling. Bitcoin’s drop triggered more than $150 million in long liquidations, while ether fell toward $2,850, with roughly $140 million in longs liquidated.

Prediction markets indicate rising uncertainty over Japan’s policy path. Polymarket traders now assign roughly a 50% probability to a December rate hike, up seven percentage points from prior levels.

This week, market participants will closely watch yen movements and BOJ communications. Any further signals of tightening could spark additional volatility across regional markets and crypto assets.

Other Market Highlights:

• Gold: Goldman Sachs reports nearly 70% of institutional investors expect gold to continue rising, with the largest group forecasting prices above $5,000 by 2026.
• Nikkei 225: Asia-Pacific equities slipped Monday as traders awaited China’s manufacturing data and factored in an 87% chance of a Fed rate cut, with Japan’s Nikkei 225 down 1.3%