Japan ' s long-term national debt return continues to be high and is placing new external pressure on the Bitcoin round. The market ' s willingness to allocate interest-free assets may be affected as the rates of return on major debt markets in Japan, the United States and Europe rise.
Japan's 10-year national debt rose to 30 years' high.
CoinDesk reported that Japan ' s 10-year national debt return had risen to 2.85 per cent, a new high of about 30 years and an increase of 18 basis points since the beginning of the month. Japan ' s upward rate of return has also pushed up the cost of financing in other developed markets.
Currently, the United States has a 10-year national debt return of close to 4.5 per cent, almost a month high; Germany has a 10-year national debt return of close to 3 per cent; and the United Kingdom has a 10-year national debt return of approximately 4.8 per cent. The real rate of return, adjusted for inflation, is also rising.
Over the past years, Japan has supported arbitrage with Japanese yen financing to buy high-yielding assets, relying on near-zero interest rates and large-scale quantitative easing, keeping global financing costs down in the long run. Today this environment is changing.
Bitcoin bounces against interest rate resistance.
Higher rates of return mean higher opportunity costs for holding bitcoin. In contrast to fixed-income assets, BTC itself does not generate cash flows, and when the return on bonds increases, part of the funds may shift to more explicit assets.
Bitcoin rose by about 8 per cent this month, from $58,000 in supporting positions near July 1, to about $64,000. The driving factor is mainly the re-pricing of the United States interest rate path by the market.
The report mentions that two changes have helped to boost market sentiment: on 1 July, Federal Reserve Chairman Kevin Warsh stated that inflation risk had abated more than a few weeks earlier; and in June, the United States, where non-farm employment data were weaker than expected, saw about half of the projected new employment and labour participation drop to 61.5 per cent, more than five years lower.
High global rates of return weaken the expected benefits of easing.
Against this background, the market had previously reduced expectations of maintaining high interest rates in the United States, which supported risk assets such as bitcoin. But if Japan continues to drive up the global rate of return, this may be offset.
However, the market is not entirely prudential. Goldman Sachs continued to state that it was expected that the yen would continue to weaken and maintain a preference for arbitrage for Japanese yen financing. This means that some agencies have not fully withdrawn from the risk trade because of Japan ' s rising rate of return.
Overall, the bitcoin short-line rebound continues, but interest rate changes in Japan are becoming a new macro variable. If the global real rate of return continues to rise, the valuation pressure on risk assets is likely to increase further.