[DigitalToday reporter Jinju Hong (홍진주)] An analysis said rising Japanese government bond yields are tightening global liquidity and slowing bitcoin (BTC) in its rebound.

On April 6, blockchain media outlet BeInCrypto reported that XWIN Research recently assessed that a sharp rise in Japanese rates is shifting money flows and weighing on risk assets broadly.

The key variable is the possibility of Japanese funds flowing back home. Japan's 10-year government bond yield has recently risen to 2.39 percent, the highest since 1999. XWIN Research said that given the scale of government bond holdings in Japan of about 390 trillion yen, an additional 1 percentage point rise in yields could generate unrealised losses worth tens of trillions of yen for banks, insurers and pension funds. It explained that as financial institutions move to defend their financial soundness, they could sell risk assets or bring overseas investment funds back to Japan.

Japan's status as one of the world's largest net overseas investors is also a burden factor. If funds return to the home country, liquidity across global markets is bound to shrink. The report said bitcoin is taking a direct hit from the liquidity contraction in this flow.

Bitcoin's price is also closely linked to the liquidity cycle, the analysis said. XWIN Research noted that bitcoin tends to rise in an accommodative liquidity environment but stagnate during periods of rising rates. If rates rise, selling pressure increases and higher borrowing costs and reduced leverage follow, limiting new inflows, it said.

Not all internal indicators of the crypto market are negative. The report cited a recovery of ERC-20-based stablecoin supply to a record high and said idle funds exist in the market. Even so, it pointed to the fact that those funds are not flowing into bitcoin as a key variable. It also found that about $9.6 billion moved out of bitcoin into stablecoins in early 2026.

XWIN Research also stressed that on-chain indicators alone have limits in explaining the market. A stronger yen could act as a factor pulling funds out of dollar-denominated assets, and cryptoassets are also within its sphere of influence, it said. The analysis said rates, currencies and capital flows ultimately work in combination to determine bitcoin's price.