Japan's 2-year government bond yields just climbed to 1.245%, marking the highest level since 1996. This move isn't happening in a vacuum.

When JGB yields spike like this, it signals shifting expectations around Bank of Japan policy and global interest rate trajectories. Higher yields in one of the world's largest fixed-income markets typically compress valuations across riskier assets—including crypto.

Here's the thing: during periods of rising bond yields, investors often rotate capital away from growth-heavy and speculative positions. The liquidity conditions that fueled the previous bull run get tighter. That said, extended periods of higher rates can also stabilize inflation expectations, which some argue provides a healthier foundation for longer-term asset class rotation.

For traders watching macro flows, Japanese rate moves matter because they influence carry trade dynamics and global funding conditions. Worth monitoring how this plays into broader monetary policy divergence across major economies.