The Bank of Japan is preparing to raise interest rates at its December policy meeting, a move that would push the country’s benchmark rate to its highest level since 1995 and potentially spur a recovery in global risk markets, including crypto.

People are aware of this issue told Bloomberg Policymakers are leaning toward a 25-basis-point hike to 0.75 percent at their Dec. 19 meeting, which doesn’t put global markets or Japan’s domestic outlook on a major shock.

The yen strengthened after the report, climbing to near 154.56 per dollar from above 155 on Friday.

Such implications run through yen-financed trades, one of the oldest macro linkages in the financial world. Hedge funds and proprietary trading desks have historically borrowed the yen at extremely low rates to finance leveraged positions in high-beta assets.

A shift toward higher Japanese rates reduces the attractiveness of this trade and could force positioning adjustments in markets where leverage and liquidity are most sensitive, including Bitcoin.

A stronger yen typically coincides with risk aversion in macro portfolios, and that dynamic could tighten liquidity conditions that have helped bitcoin’s recent rebound from November lows.

BTC slipped to 86,000 earlier in the week, alongside US equities, before recovering above 93,000, and after a month of macro-driven volatility heavily influenced by global rate expectations.

Gov. Kazuo Oda indicated Monday that the board would make an “appropriate decision” about the rates, language similar to earlier remarks. Market prices now imply a roughly 90% chance of a December move. Prime Minister Sana Takechi’s key ministers are not expected to oppose the change.

BOJ officials are also likely to indicate a readiness to tighten further if their outlook materializes, although they remain cautious about committing to a path.

For bitcoin traders, there is little risk around Japan’s terminal rate and a decades-long directional hiatus in global liquidity.

If yen funding costs continue to rise, leveraged macro funds can trim exposure to BTC and other high-volatility assets. But a controlled, additional BOJ tightening, without a sharp equity drawdown, could have a limited impact in the near term, especially with rising odds below US rates.