Asia Morning Briefing: BOJ Rate Hike Bets Spark Market Selloff and Bitcoin Dip – What You Need to Know

Good morning! Let’s dive into what’s happening with the markets in Asia.

Bitcoin recently dipped below $90,000 during morning hours in Hong Kong, driven down by rising Japanese bond yields. These yields hit a 17-year high, pushing traders to sell off riskier assets. The yield on Japan’s 2-year bond even reached 1.01 percent, the highest since 2008. This shift reflects expectations that the Bank of Japan may soon raise interest rates. BOJ Governor Kazuo Ueda hinted at this during recent statements.

As traders responded, the yen strengthened, contributing to the decline of yen-funded carry trades, which have been supporting risk assets this year. The crypto market felt the pressure, with Bitcoin dropping to $87,500 and Ether falling similarly.

Currently, there’s uncertainty about Japan’s future policy. Traders on Polymarket estimate about a 50% chance of a rate hike in December. This week, market watchers will be keen to see how the yen moves and what signals the BOJ sends. Further tightening might lead to increased volatility across crypto and other markets.

Recent market movements have shown significant liquidations. Over $150 million in Bitcoin longs were wiped out, and Ether faced about $140 million in similar losses as traders adjusted to the new yield environment.

In the gold market, expectations are positive. According to Goldman Sachs, nearly 70% of institutional investors believe gold prices will continue to rise. Some even predict prices could exceed $5,000 by 2026.

Looking at broader markets, the Asia-Pacific region took a hit on Monday, with Japan’s Nikkei 225 falling by 1.3%. Traders are closely monitoring manufacturing data from China and pricing in an 87% chance of a Federal Reserve rate cut.

In the crypto space, there are other notable updates: Bitcoin ETFs are reportedly a top revenue source for BlackRock, according to executives. Additionally, some projects, like the Ethena-incubated DEX Terminal Finance, have faced challenges and recently abandoned their launch plans following issues with the Converge chain.

As we navigate these shifting market dynamics, it’s essential to stay informed and consider how global financial trends can have local impacts. Keep an eye on developments; they can affect your investments more than you might think.

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