If the Bank of Japan (BOJ) delays QT and restarts QE at its June meeting risk assets are going to fly

Global markets are closely watching the Bank of Japan (BOJ)’s upcoming monetary policy meeting, which is set to take place on 16–17 June.

Global markets are closely watching the Bank of Japan (BOJ)s upcoming monetary policy meeting, which is set to take place on 16-17 June.

After keeping interest rates at an ultra-low level for a prolonged period and initiating a program to reduce government bond holdings earlier this year, speculation is growing that the central bank may shift towards a more accommodative position, potentially reintroducing quantitative easing (QE) measures.

According to Arthur Hayes, co-founder of BitMEX and CIO of Maelstrom, a shift in Japan’s monetary policy could significantly help Bitcoin [BTC] and other cryptocurrencies.

If the BOJ delays QT, and restarts selected QE at its June meeting risk assets are going to fly.

For context, Japan’s latest economic data has presented a mixed picture for policymakers. In May, the country’s wholesale inflation slowed notably, with the Corporate Goods Price Index (CGPI) rising by 3.2% year-over-year. This is the weakest pace since September and follows April’s 4.0% increase.

The deceleration, largely driven by declining import costs for raw materials, may reduce the urgency for the BOJ to adjust interest rates. However, rising prices in categories like food and beverages suggest that companies are still passing on higher input costs to consumers, despite uncertain global conditions and subdued domestic demand.

This portion of the report focused on the broader economic backdrop and the central bank’s upcoming decision on whether to maintain or pivot its current monetary stance.

As wholesale inflation slows, consumer prices will also come under downward pressure with a lag. The BOJ may have lost the opportunity to raise interest rates because inflation will have slowed significantly by the time the fog hanging over Japan’s tariff talks (with the U.S.) clears.

Additionally, Japan’s deepening bond market crisis is casting a shadow over its broader financial stability, as yields on long-term government bonds hit record highs and liquidity concerns are emerging, reminiscent of the 2008 meltdown.

Despite these challenges, the country’s crypto sector has continued to expand, with 32 registered crypto exchanges as of late April, showcasing the growing interest in digital assets among Japanese investors.

This contrast is a sign of shifting investor sentiment, as more market participants view Bitcoin as a potential hedge against the traditional financial system’s vulnerabilities, especially amid rising inflation and geopolitical tensions.

Moreover, with the yen carry trade weakening and economic uncertainties mounting, digital assets like BTC are emerging as safer or higher-yield alternatives in Japan’s evolving financial landscape.

A falling yen often means economic instability or loose monetary policy in Japan, prompting investors to seek safer or higher-yield alternatives. In this environment, Bitcoin could gain appeal as a hedge against currency devaluation and financial uncertainty.

Altogether, a weakening yen could act as a bullish catalyst for Bitcoin in both local and global contexts.