According to CoinDesk, the Bank of Japan (BOJ) may cause significant shifts in global market flows, potentially impacting cryptocurrencies. Griffin Ardern, a volatility trader from crypto asset management firm Blofin, believes that the BOJ's unclear policy path makes it more likely to surprise the market beyond expectations. Since 2016, the BOJ has implemented yield curve control (YCC), guiding short-term interest rates at minus 0.1% and the 10-year government bond yield at around 0%. These liquidity-boosting policies have put downward pressure on global bond yields, adding trillions of dollars in global liquidity and popularizing carry trades.

A potential unwinding of the negative interest rate policy and the yield curve control by the BOJ may strengthen the Japanese yen and have knock-on effects on risk assets, including cryptocurrencies. Charles Schwab voiced a similar opinion earlier this year, stating that the carry trade can unwind quickly, leading to outsized cross-market volatility. Most economists polled by Reuters between September 8-19 expect the BOJ to end the negative interest rate policy and abolish the curve control program next year. ING suggests that the central bank may drop hints of the eventual hawkish move on Friday, following higher-than-expected inflation and a weak Japanese yen, combined with rising global oil prices.