Japan's foreign exchange reserves reached $1.3698 trillion at the end of December, an increase of $104 billion from $1.3594 trillion in November. Although this growth appears modest, it reflects the Bank of Japan's ongoing adjustments in the global liquidity environment. As Federal Reserve policy expectations change and the yen's volatility intensifies, the increase in foreign exchange reserves typically indicates that the central bank is taking defensive measures. For the crypto market, such central bank actions often imply a contraction or reallocation of global liquidity — when traditional foreign exchange reserves rise, it sometimes also signals increased pressure to reallocate into emerging assets.