Bitcoin Hits Record High as Yen Strengthens on US-Japan Policy Tensions

Bitcoin briefly surged past $124,500 during Asian trading on Thursday, setting a fresh all-time high before retreating. The rally coincided with the Japanese yen climbing to its strongest level since late July, as markets reacted to speculation of a potential rate hike in Japan.

The yen’s jump followed comments from US Treasury Secretary Scott Bessent, who said he had told the Bank of Japan (BoJ) it was “behind the curve” in addressing inflation. His remarks fueled expectations that the BoJ might quicken its pace of monetary tightening.

Having begun raising rates in 2024 after years of negative interest policy, the BoJ has been treading a careful path between curbing inflation and sustaining growth. Bessent’s comments added pressure, triggering a swift move in currency markets.

Market Reaction in Asia and the US

In Tokyo, the Nikkei 225 fell 1.4% to 42,657.94 as investors took profits after recent record highs. The stronger yen weighed heavily on exporters, with technology and automotive shares among the hardest hit.

On Wall Street, sentiment stayed positive. The Dow Jones Industrial Average advanced 1% to 44,922.27, the S&P 500 rose 0.3% to 6,466.58, and the Nasdaq inched up 0.1% to 21,713.14. US 10-year Treasury yields slipped to 4.245% from 4.290%, indicating a modest uptick in bond demand.

Bitcoin’s Record-Breaking Rally

Bitcoin’s latest surge has been driven by optimism following pro-crypto regulatory changes under President Donald Trump’s administration. The reforms, widely seen as industry-friendly, have strengthened investor confidence and attracted institutional inflows.

Analysts highlight a mix of factors supporting the rally: a softer US dollar, growing acceptance of Bitcoin as an inflation hedge, and renewed interest from large investors. Although the cryptocurrency retreated slightly after reaching its peak, many believe the broader bullish trend could continue if supportive conditions persist.

Outlook

Investors are now awaiting further signals from the Bank of Japan and key US economic data for clues on the yen’s trajectory and Bitcoin’s momentum. A confirmed Japanese rate hike could drive the yen higher, while continued favorable US policies for the crypto sector may keep Bitcoin on its upward path.