#GAIA #btc$btc #eth The Impact of Yen Rate Hikes
1. Capital Flows and Funding Costs
Reduction in Yen Arbitrage Trading:
As a major low-interest financing currency globally, the Japanese yen is often borrowed for investing in high-risk assets (such as cryptocurrencies). If Japan raises interest rates, borrowing costs increase, potentially shrinking the scale of carry trades, leading some funds to flow back from the crypto space into yen assets, causing short-term downward pressure on the cryptocurrency market.
Liquidity Tightening:
Rate hikes reduce liquidity in global financial markets
1. Capital Flows and Funding Costs
Reduction in Yen Arbitrage Trading:
As a major low-interest financing currency globally, the Japanese yen is often borrowed for investing in high-risk assets (such as cryptocurrencies). If Japan raises interest rates, borrowing costs increase, potentially shrinking the scale of carry trades, leading some funds to flow back from the crypto space into yen assets, causing short-term downward pressure on the cryptocurrency market.
Liquidity Tightening:
Rate hikes reduce liquidity in global financial markets
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