Japan's anticipated interest rate hikes may suppress liquidity in risky assets such as Bitcoin.

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According to Coindesk, the Bank of Japan is expected to raise interest rates to 0.75% at its meeting, the highest level since 1995, which will impact global markets, including cryptocurrencies. Higher Japanese interest rates will reduce the attractiveness of the trade and could force position adjustments in markets most sensitive to leverage and liquidity, including Bitcoin. A stronger yen is typically accompanied by reduced macro portfolio risk, and this dynamic could tighten liquidity conditions, which recently helped Bitcoin rebound from its lows.

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