The Bank of Japan is expected to raise interest rates to 0.75% on Friday, reaching the highest 30-year rate, as Bitcoin rides the roller coaster back to $86,000.

The market probability of the Bank of Japan (BOJ) raising interest rates to 0.75% this Friday has reached 95%, potentially hitting the highest record in 30 years. After a short-term surge past $90,000, Bitcoin quickly retreated, and the overall Crypto market experienced a broad decline.
(Background: Is Bitcoin selling pressure about to end? K33: Long-term holders are exiting, and institutional demand in 2026 may bring a turning point)
(Additional context: Bloomberg analyst: Bitcoin’s bullish momentum will “drop to $10,000,” community mock: Always wrong prophets)

The BOJ will announce its decision after the December 18–19 meeting (expected Friday afternoon). Based on overnight index swap (OIS) calculations, the probability of a 1 basis point (0.25%) rate hike to 0.75% is as high as 95%, rewriting the highest policy rate record since 1995.

Rate hike confidence: Inflation and wages rising in tandem

This “almost certain” move is supported by three core data points.

First, core CPI has been above the 2% target for 28 consecutive months, with a 3.0% year-over-year increase in October.

Second, nominal wages in October increased by 2.6% annually, beating market expectations of 2.2%, indicating a wage-price spiral is forming.

Third, the yen once depreciated past 157.9, and import-driven inflation pressures forced the BOJ to act. Although the tariff impacts since President Trump took office are considered “below expectations,” the narrowing of the US-Japan interest rate differential further supports the rate hike decision.

But even with the rate rising to 0.75%, the BOJ seems to believe the level is still below the “neutral interest rate” range of 1%–2.5%. Ueda and his team hinted that this week’s action is just the beginning, with room for further increases.

Bitcoin’s Volatility

Perhaps to guard against capital fluctuations caused by yen rate hikes closing arbitrage trades, Bitcoin surged past $90,000 last night, only to face heavy selling pressure and drop back to $85,000, currently trading at $86,137 before press time.

In summary, this week’s BOJ move is not just a rate hike but a milestone for Japan bidding farewell to long-term ultra-low interest rates and moving toward policy normalization. Investors should now focus not on whether there will be another hike, but where the terminal rate will ultimately settle.

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According to the latest data from Coinglass, during last night’s sharp volatility, a total of 153,000 people were liquidated across the network within the past 24 hours, with total liquidation amount reaching $530 million.

!Screenshot 2025-12-18 09:53:40 | Dapp Trend - The Most Influential Blockchain News Media

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