The Bank of Japan maintains its interest rate unchanged, and the recent market decline over the past few days is due to this reason. Previously, the market generally expected the Bank of Japan to raise interest rates, but based on statements from Bank of Japan officials today, it is most likely that the Bank of Japan will raise interest rates in June.

The yen is actually one of the major providers of US dollar liquidity worldwide, with many funds borrowed in yen at low interest rates, then exchanged for US dollars, and invested in markets with higher yields. This is a typical carry trade transaction. But if Japan raises interest rates, this arbitrage position will be forced to close, and liquidity will be quickly drained.
Many people may not realize the importance of Japan's daily interest rates, thinking that global liquidity is mainly influenced by the Federal Reserve, but in fact, Japan's super-low interest rates are one of the "water taps" for global funds. Once interest rates are raised, the tap will be tightened, and the global markets will have to follow closely.
On March 19, 2024, the Bank of Japan raised interest rates, causing the US stock market and crypto market to abruptly stop their bull run. On July 31, 2024, the Bank of Japan raised interest rates again, Bitcoin dropped from 62,000 to 49,000, and on December 12, 2025, the Bank of Japan raised interest rates once more, with Bitcoin falling from 116,000 to 80,000. So, we should pay attention to the actions of the Bank of Japan in June.