[DigitalToday reporter Yoonseo Lee] Observers are increasingly suggesting that XRP could face renewed downward pressure amid worries about a yen carry trade unwinding.

On July 8 (local time), blockchain media outlet The Crypto Basic reported that speculation about possible further action by the Bank of Japan (BOJ) is spreading, drawing market attention to XRP's near-term price moves.

At the heart of the concern is the possibility of a policy shift by the BOJ. An X (formerly Twitter) account called "Yuto", which claims to be linked to the BOJ, recently posted to the effect that "the Bank of Japan is preparing measures that will affect the lives of billions of people." The account also said it offered a deep apology to Western countries, focusing attention on the impact a Japanese policy change could have on overseas markets.

Yuto did not specify what the measures would be. But in the market, a view has taken hold linking it to the possibility of a yen carry trade unwind. Speculation has been supported by the account's track record of hinting at BOJ policy decisions before official announcements in the past.

The backdrop is Japan's rate-hike stance. After Prime Minister Sanae Takaichi took office in October 2025, Japan raised rates twice. In June, the BOJ raised its benchmark rate by 25 basis points to 1%, the highest level in 31 years, and said it could move to additional hikes to curb prices.

In this situation, markets are watching the BOJ's next rate decision on July 30. Expectations have emerged that it could raise borrowing costs further as import prices rise and the yen weakens. Some have even cited the possibility of a steep hike similar to 2024.

In July 2024, the BOJ made an unusual decision to raise its benchmark rate to 0.25% from the 0 to 0.1% range. Global markets then shook sharply and the yen carry trade unwinding gathered pace. When rates rise, returns fall on trades that borrow yen to invest in overseas assets, prompting investors to sell foreign assets to repay yen loans.

XRP did not escape the shock at the time. XRP rose to $0.659 on July 31, 2024, but slid 34% to $0.432 on Aug. 5 that year over a few days as the rate hike and the ensuing unwinding proceeded. The explanation is that as liquidity drained from digital assets broadly, XRP's price was also pressed down.

That is also where the market's current wariness lies. If the scale of the unwind this time approaches 2024 levels, a similar shock could be repeated for XRP. Based on the current price of $1.09, a drop of the same magnitude could push it down to around $0.72.

Still, this outlook is not based on any confirmed policy announcement. It is unclear whether the BOJ will actually move to a steep rate increase, and whether that would immediately lead to a large-scale yen carry trade unwind.

Even so, there is a clear reason the market is sensitive to the issue. The BOJ signalled willingness for additional tightening alongside its June rate hike, and there is precedent from 2024 when a policy shift directly jolted global markets and cryptocurrencies. With weak conditions persisting, the BOJ's July 30 decision is emerging as a factor that could increase short-term volatility in digital asset markets, including XRP.

The measures the Bank of Japan is preparing will affect the lives of billions of people. To all in Western countries, I offer my deepest apologies. This is not a personal matter. May God bless you.