Bitcoin News Today: Japan's Fiscal Surge Sparks Global Ripple, Capping Bitcoin's Ascent

Bitcoin faces renewed pressure as Japanese government bond (JGB) yields surge to a 17-year high, with the yen depreciating against the U.S. dollar amid shifting macroeconomic dynamics. The 10-year JGB yield hit 1.70% on October 8, 2025, the highest since July 2008, while the 30-year yield briefly climbed to 3.34% before retreating to 3.16% [1]. This sharp rise reflects growing concerns over Japan's fiscal sustainability under Prime Minister Takaichi Sanae's expansionary Abenomics policy, which emphasizes increased government spending to stimulate growth. Analysts note that such fiscal expansion could exacerbate bond supply, driving yields higher and dampening risk appetite for assets like Bitcoin [1].

The yen's depreciation, which has fallen 3.5% against the dollar since October 1, further amplifies Bitcoin's challenges. A weaker yen is linked to Abenomics' low-interest-rate environment, which reduces the likelihood of Bank of Japan (BoJ) rate hikes [1]. The dollar index (DXY), which includes the yen as its second-most-weighted currency, has climbed to a two-month high, tightening financial conditions and capping upside potential for BTC, gold, and other dollar-denominated assets [1]. Rising yields and a stronger dollar typically deter investors from riskier assets, a dynamic that has stalled Bitcoin's recent rally despite earlier gains to all-time highs in both dollar and yen terms [1].

Goldman Sachs has highlighted the spillover risks of Japanese bond volatility, warning that a 10-basis-point "idiosyncratic JGB shock" could push U.S., German, and U.K. yields up by 2–3 basis points, intensifying global market jitters [1]. This interconnectedness underscores how Japan's fiscal and monetary policies are reshaping global liquidity flows. Meanwhile, Japanese bond auctions have shown weak demand, with the 2-year JGB experiencing its lowest subscription levels in 17 years, signaling investor skepticism about fiscal stability [2]. Such developments could redirect capital toward safe-haven assets like gold, which has surged past $4,000 an ounce, while Bitcoin remains vulnerable to further correction [1].

The yen's decline has also reignited debates about its role in global carry trades. Historically, a stronger yen has reduced the appeal of yen-based leveraged investments in risk assets like Bitcoin, a trend that could persist if Japan's bond market remains volatile [2]. Analysts like Dante Cook of Swan Bitcoin argue that Japan's heavy reliance on U.S. Treasuries-accounting for 4% of its forex reserves in gold-poses systemic risks should the country pivot to defend its currency [2]. This scenario could indirectly pressure Bitcoin as liquidity shifts toward traditional safe havens or higher-yielding assets.

Bitcoin's current dynamics highlight its dual identity as both a risk asset and a digital store of value. While it has historically tracked tech stocks more closely than gold, the recent yield-driven sell-off underscores its sensitivity to macroeconomic shifts [1]. Institutional demand, however, remains a counterweight: spot Bitcoin ETFs have attracted $160.97 billion in assets under management as of October 2025, with inflows accounting for 60% of BTC's price action [3]. Sustained ETF demand could offset short-term pressures, but immediate volatility is expected as traders navigate conflicting signals from bond markets and central bank policies [3].

The path forward for Bitcoin hinges on balancing these factors. Goldman Sachs' analysis and Japan's fiscal trajectory suggest that global yields may remain elevated, potentially capping BTC's growth until liquidity conditions stabilize [1]. For now, investors are closely monitoring the yen's performance, JGB auctions, and BoJ policy cues for signs of resolution.