According to The Kobeissi Letter, the Bank of Japan (BOJ) triggered a surge in Japanese bond yields by halting its long-standing bond buying program, resulting in increased bond supply in the market and higher yields (source: The Kobeissi Letter, May 25, 2025). The BOJ's move comes with its massive balance sheet still in play, raising concerns over global liquidity and risk appetite. This shift impacts major financial markets, as higher Japanese yields can lead to capital rotation from risk assets, including cryptocurrencies, potentially increasing volatility and influencing short-term crypto trading strategies.

According to The Kobeissi Letter, Japan's 30-year government bond yield has surged to 3.20%, marking a 100 basis point increase since its April 7th low and a 45% jump in just 44 days (Source: The Kobeissi Letter, Twitter, May 21, 2025). This rapid rise in Japanese yields signals tightening liquidity and increased volatility in global financial markets, which often leads to capital outflows from risk assets like cryptocurrencies. Traders should watch for potential downside in major crypto assets as higher yields in traditional markets may reduce demand for digital currencies.