Bitcoin’s Rally Faces New Threat From Rising Japanese Bond Yields

Bitcoin’s recent rebound to around $63,000 is running into a new obstacle as Japanese government bond yields surge to their highest level in 30 years. The 10-year JGB yield climbed to 2.85%, up 18 basis points since the start of the month, pushing borrowing costs higher across other major developed markets.

US and European Yields Follow Suit

The US 10-year Treasury yield has risen nearly three basis points, testing 4.5% for the first time in almost a month. Germany’s 10-year bund is nearing 3%, and the UK’s 10-year gilt sits around 4.8%, with inflation-adjusted real yields also climbing.

Why This Matters for Bitcoin

For years, Japan’s near-zero rates and aggressive bond buying kept global yields low, fueling carry trades that indirectly capped borrowing costs worldwide. Rising JGB yields threaten to unwind that effect. Higher bond yields raise the opportunity cost of holding an asset like Bitcoin that generates no yield, since capital could instead earn steady returns in fixed income.

Recent Rally Built on Fading Rate Fears

Bitcoin found support near $58,000 on July 1 after Fed Chair Kevin Warsh said inflation risks had eased, followed by a weak June jobs report showing labor force participation at a five-year low. Those developments fueled Bitcoin’s climb toward $64,000, but hardening global yields could undercut that momentum.

Goldman Sachs Stays Bullish on Yen Carry Trades

Despite rising Japanese yields, Goldman Sachs said it still expects the yen to weaken further and continues favoring yen-funded carry trades.