Japan Inflation Exceeds BOJ Target, Two December Rate Hikes Expected

WHY IT MATTERS

Central banks control interest rates, which affect how much it costs to borrow money. When borrowing is cheap, investors are more willing to put money into riskier assets like cryptocurrencies. Japan has kept borrowing costs extremely low for years, and some traders have taken advantage of this by borrowing Japanese yen cheaply and investing it elsewhere — a strategy called a 'carry trade.' Think of it like borrowing money at a very low rate from one bank and depositing it somewhere that pays a higher return. If Japan raises its interest rates, this strategy becomes less attractive, and traders may pull money out of riskier investments to pay back their loans. This is why changes in Japanese monetary policy can ripple through global markets, including crypto.