Bitcoin (BTC) Steadies Near $77,600 After Bank of Japan Rate Hike to 1.25%

Rates at a Three-Decade High

The Bank of Japan raised its policy rate to 1.25% on Friday, the highest level since 1995, capping one of the most consequential weeks for global monetary policy this year. The nine-member board approved the move 7-2, with board members Toichiro Asada and Ayano Sato dissenting; in the official statement, both argued that core CPI gains still below 2% did not obviously justify a further tightening. Markets had priced the hike almost fully before the meeting ended. Friday's move is the sixth increase of the current cycle, which began in March 2024 when the policy rate stood at -0.1%. Alongside the main rate, the bank lifted its complementary deposit facility rate to 1.25% and its benchmark loan rate to 1.5%, all effective September 24. Crypto reaction was measured: Bitcoin traded above $77,000 shortly after the announcement and holds near $77,600 as of press time, per COINOTAG's live market snapshot.

A Week of Global Rate Moves

The hike closes a compressed stretch of decisions across major economies. On Wednesday, the Federal Reserve lifted its target range to 3.75%-4.00% in a unanimous vote — its first increase since 2023 — and a week earlier the European Central Bank raised all three key rates by 25 basis points, taking its deposit facility to 2.50%. The driver behind Tokyo's move is energy. Japan imported 94% of its crude oil from the Middle East in 2025, most of it routed through the Strait of Hormuz, and the war in Iran has disrupted those flows and lifted prices this year. Japanese headline inflation ran at 1.9% in August, while core eased to 1.7% from 1.8%. Britain went the other way: the Bank of England held its rate at 3.75% for a sixth straight meeting, with three of nine policymakers pushing for 4%, and Governor Andrew Bailey said higher global energy costs have so far had a limited effect on UK price and wage setting. UK inflation did hit a five-month high of 3.1% in August, but the yen adds pressure Britain does not face — Tokyo and Washington intervened jointly in August after the currency sank to a 40-year low, their first coordinated action since 2011. Economists polled by Reuters expect the rate at 1.5% by end-March 2027, then 1.75% in the second quarter.

Guidance: More Hikes, Not a Pivot

The forward guidance is unusually explicit. The bank wrote that underlying CPI inflation has been approaching its 2% target, flagged the risk of inflation drifting upward past that goal as firms keep passing wage and input costs into consumer prices, and committed to continue raising the policy interest rate while adjusting the degree of monetary accommodation. The dissents rest on different logic: Asada argued that consumer inflation below 2% does not signal a clearly strong economy, while Sato saw no acceleration justifying a hike now. For risk assets, the key line is the bank's expectation that accommodative financial conditions will persist after the adjustment — this is a narrowing of stimulus, not a pivot to hard tightening. The AI framing matters too: by naming global AI-related demand as both a growth support and a producer-price driver, the BOJ ties its tightening path to the infrastructure capex cycle led by firms such as Alphabet — a theme that also feeds algorithmic momentum strategies, from institutional desks down to the retail AI trading bot segment. Rising Japanese rates also slowly raise the funding cost of the yen-carry trade, the liquidity that has historically supported leverage across DeFi and the wider crypto market. Readers tracking the market in real time can follow live spot and futures prices on Bybit.

$77,600 Level in Focus

The through-line across Friday's decision: energy-driven inflation is forcing central banks to tighten even where growth is soft — the kind of global liquidity backdrop that has historically preceded bear market conditions for risk assets. COINOTAG's aggregate data shows appetite still intact, however: the Fear & Greed Index reads 56/100 (Greed), with Bitcoin holding 67.7% of our tracked market cap of $2.30 trillion.