Hello, Asia. Here’s what’s making news on the markets:
Welcome to Asia Morning Briefing, a daily summary of the top news stories during U.S. business hours and insight into market movements and analysis. For a detailed overview of US markets, see Crypto Daybook Americas from CoinDesk.
Bitcoin fell below $90,000 in Hong Kong morning trading as Japanese bond yields hit new 17-year highs, sparking a wave of risk-free selling in regional markets.
The yield on 2-year Japanese government bonds briefly touched 1.01 percent, the highest since 2008, as traders bet the Bank of Japan’s long stretch of near-zero rates is coming to an end. The selloff follows comments from BoJ Governor Kazuo Ueda, who said the board would assess whether a rate hike was appropriate at this month’s meeting.
Traders pushed the yen higher during the morning session in Tokyo, which will ultimately accelerate the unwinding of yen-funded carry trades that have supported risk assets throughout the year.
Crypto markets, which are deeply sensitive to short-term liquidity conditions in Asia, were hit hardest by the move, with BTC falling below $87,500 and Ether following lower.
Forecast markets reflect uncertainty over Japan’s political outlook, with traders at Polymarket now pricing the chances of a December rate increase at around 50%, a rise of seven percentage points.
This week, traders will focus on the movement of the yen and what the BOJ communicates. Any additional tightening signals could trigger a new wave of volatility in regional markets and cryptocurrencies.
Market movement
BTC: Bitcoin’s fall below $87,500 triggered a wave of forced selling, with more than $150 million in long BTC positions liquidated as rising Japanese yields pushed traders to unwind their leveraged positions.
ETFs: Ether fell to $2,850, with about $140 million in long positions liquidated as Japan’s changing rate outlook tightened liquidity early in the Asian session.
Gold: Goldman Sachs says nearly 70% of institutional investors expect gold to continue growing, with the largest group forecasting prices above $5,000 by 2026.
Nikkei 225: Asia-Pacific markets fell on Monday as traders awaited Chinese manufacturing data and priced an 87% chance of a Fed rate cut, with Japan’s Nikkei 225 down 1.3%.
Elsewhere in crypto
- Bitcoin ETFs Are Now BlackRock’s Main Revenue Source, Says Exec (CoinDesk)
- DEX Terminal Finance, incubated by Ethena, abandons its launch after the failure of the Converge chain (The Block)
