TechFlow, Dec 19 — On December 19, the Bank of Japan raised interest rates by 25 basis points as expected, bringing the rate to 0.75%, the highest level in approximately 30 years. Meanwhile, a draft of Japan's tax reform proposal suggests that starting from 2027, income tax rates across all income brackets may increase by one percentage point. In the short term, markets are pricing in "rising yen funding costs and fluctuating risk sentiment." For digital currencies, higher interest rates increase the cost of yen-denominated financing. If carry-trade funds reduce leverage and trim positions in high-volatility assets, digital currencies may experience sharper price swings and increased volatility. Analysts at BiyaPay suggest monitoring key USD/JPY levels alongside U.S. equity market risk sentiment, with a near-term focus on managing leverage and position sizing. BiyaPay supports spot and derivatives trading in digital currencies, as well as multi-asset trading including U.S. and Hong Kong stocks, enabling users to dynamically adjust portfolios according to their risk appetite.
