The Japanese government recently launched a 21 trillion yen economic stimulus package, equivalent to over $135 billion. This funding is mainly raised through bond issuance, with the direct consequence being the depreciation of the yen to its lowest point in 10 months and a record high yield on 40-year government bonds.

Traditional financial markets have reacted strongly to this. The yen continues to weaken, and long-term bond yields are surging—this combination usually indicates rising inflation expectations. When fiat currency purchasing power declines and the appeal of fixed-income assets diminishes, capital tends to seek new allocation directions.

Mainstream digital assets like Bitcoin and Ethereum have demonstrated some inflation-hedging characteristics during past monetary easing cycles. While they cannot be simply equated with safe-haven assets, some investors do use them as one of the tools to hedge against inflation. In theory, Japan’s large-scale fiscal stimulus could lead to expectations of increased capital inflows into the crypto market.

However, it’s important to note that Japan’s fiscal situation is already under pressure, and there is uncertainty regarding future policy directions. The market’s response to macroeconomic changes is often delayed and complex, and short-term volatility is hard to predict.

If you’re considering allocating funds, here are a few basic principles for reference:

First, control your position size—don’t bet all your capital on a single asset. Bitcoin is relatively stable and can serve as a barometer for market sentiment.

Second, building your position in batches is safer than making a lump-sum purchase. Focus on mainstream coins with higher market capitalization, and be cautious with projects whose fundamentals are unclear.

Lastly, holding is more important than frequent trading. Major trends take time to play out, and chasing gains or selling on dips only increases costs.

The impact of macroeconomic policy on the market is a long-term issue; maintaining rational judgment is more valuable than blindly following the crowd.