Original Title: "Arthur Hayes: BOJ's 'Conditional Rate Hike' or QE Restart Could Trigger a Risk Asset Rally: Bitcoin Set to Surge"

Written by: 0xJigglypuff, BlockTempo

Bank of Japan (BOJ) Governor Kazuo Ueda hinted that inflation has not yet reached its target and maintained that rate hikes would be implemented at the right time. However, BitMEX co-founder Arthur Hayes predicts the central bank will pivot toward monetary easing, potentially igniting a global rally in risk assets.

On June 10, 2025, BOJ Governor Kazuo Ueda's statement once again grabbed global attention. Ueda indicated that if underlying inflation continues accelerating, the BOJ would persist in raising rates. Yet, Arthur Hayes, co-founder of BitMEX, interpreted different signals in the market. In a post on X (formerly Twitter), he suggested that Japan exhibits a scenario where "inflation hasn’t risen enough" to warrant rate hikes. Hayes argued that Japanese citizens largely oppose the negative impacts of rate increases and predicted that should the BOJ choose to delay quantitative tightening (QT) or even partially reinstate quantitative easing (QE) during the upcoming June meeting, global risk asset markets could witness a significant upswing.

The Implications of the BOJ's Statements

Kazuo Ueda's remarks were made against the backdrop of Japan's prolonged ultra-loose monetary policy aimed at combating deflation. In recent years, global inflationary pressures have intensified, with domestic inflation also warming up. As the BOJ gradually adjusts its policy direction, markets are closely watching for the timing and magnitude of potential rate hikes. The conventional view is that rate hikes help curb inflation but may also pose a drag on economic growth.

Arthur Hayes sees this through a different lens. Previously, he had questioned the BOJ's plans to scale back bond purchases, warning that the central bank might underestimate how sensitive the bond market is to rising rates, potentially sparking market volatility. Hayes stated:

"Most Japanese citizens likely dislike the idea of a rate hike. I believe that if the BOJ decides to delay quantitative tightening or discreetly restart partial quantitative easing in the upcoming June meeting, the global risk asset markets — especially cryptocurrencies — will be poised for a grand celebration."

Hayes' reasoning is that a QE restart or QT delay by the BOJ would sustain a low-interest rate environment, driving investors to seek higher-yielding risk assets such as Bitcoin and stocks. He also identifies the continued weakening of the yen as another factor potentially fueling the upward movement in global risk asset prices.

Potential Impact of Japan's Bond Market Alarm and Yen Weakness

Recent fluctuations in Japan's bond market, such as rising government bond yields and declining demand, have led some analysts (including Hayes) to draw connections with the increasing prices of cryptocurrencies like Bitcoin. In their view, Bitcoin is perceived as a tool to hedge against sovereign credit risks, especially against the backdrop of Japan's high government debt ratio.

Hayes specifically cited the case of Norinchukin Bank, which suffered a paper loss of approximately $12.6 billion due to its large holdings of overseas bonds. He believes this event could deter other investors from buying similar assets, further destabilizing the global bond market. He predicts that if the Bank of Japan ultimately adopts a dovish stance, it may not only drive up the prices of risk assets but also perpetuate the weakness of the yen, potentially having a profound impact on global asset allocation.

Against the backdrop of most major central banks globally raising interest rates to combat inflation, the Bank of Japan's policy stance stands out as unique. Its decision-making in the June meeting will undoubtedly have a critical impact on both Japan's domestic financial markets and the global financial environment. Whether Hayes' predictions come true—particularly the boost to Bitcoin and other risk assets, as well as the persistence of yen weakness—will be key areas of focus for the market moving forward.

Original Article

Welcome to join the official BlockBeats community:

Telegram Subscription Group: https://t.me/theblockbeats

Telegram Discussion Group: https://t.me/BlockBeats_App

Official Twitter Account: https://twitter.com/BlockBeatsAsia