[Digital Today reporter Jinju Hong (홍진주)] Expectations for a June rate hike are spreading as calls grow within the Bank of Japan (BOJ) for another increase in the policy rate. As the likelihood of a stronger yen rises, risk assets including bitcoin are also on edge.

Coindesk, a blockchain media outlet, reported on April 28 local time that the BOJ held its policy rate at 0.75 percent a year, but 3 of the 9 policy board members called for an immediate rate hike. It was the biggest disagreement under Governor Kazuo Ueda's leadership.

The market took it as a hawkish signal. Traders priced in a 74 percent chance of a rate hike on June 16 shortly after the meeting. The BOJ raised its core inflation forecast for the current fiscal year to 2.8 percent and lowered its growth forecast to 0.5 percent from 1 percent.

A recent rise in international energy prices is also cited as a factor adding to tightening pressure. Energy prices rose as tensions around the Strait of Hormuz increased, raising inflation burdens for Japan's import-dependent economy.

The foreign exchange market also reacted immediately. The yen strengthened and the dollar/yen exchange rate fell to 158.95 yen. On a major-currency basis, it was down about 0.5 percent. As expectations for a rate hike grew, the yen's value rose.

In the cryptocurrency market, bitcoin/yen (BTC/JPY) weakened. BTC/JPY on Japanese exchange bitFlyer fell about 0.6 percent to 12.28 million yen.

Market participants are watching moves in the yen because it has served as a global funding currency. A representative example is the "yen carry trade," in which investors borrow yen at Japan's ultra-low rates and invest in higher-yielding assets such as U.S. stocks or cryptocurrencies.

The problem is that if the yen's strength continues, such trades could be unwound. In fact, bitcoin fell sharply last August from $65,000 to around $50,000 in a week as worries grew about liquidations of yen-based positions.

Some say, however, that signs of yen carry trade unwinds are not yet clear. Japan increased its holdings of U.S. Treasuries by $14 billion in February to a total of $1.24 trillion. Some in the market interpret that Japanese money still prefers higher-yielding overseas assets. Attention is therefore focused on the BOJ's actual June decision and whether the yen's strength persists.