Japan Approves $135B Stimulus Package: BTC Dip Keeps Giving as Yen Slump Tests Risk Assets
The post Japan Approves $135B Stimulus Package: BTC Dip Keeps Giving as Yen Slump Tests Risk Assets appeared on BitcoinEthereumNews.com.
The move comes as Prime Minister Sanae Takaichi attempts to jumpstart the world’s fourth-largest economy, but the package has triggered unexpected consequences across global markets—particularly for Bitcoin and other risk assets. The stimulus announcement sent shockwaves through financial markets, pushing Japanese government bond yields to record highs and weakening the yen to multi-month lows. Meanwhile, Bitcoin continues its painful November correction, having dropped from October highs above $126,000 to around $86,000-$92,000, raising questions about whether the traditional relationship between yen weakness and crypto rallies still holds. The Stimulus Package Breakdown The Japanese cabinet structured the package around three main goals: fighting rising prices, building a stronger economy, and improving national defense. The total package of 21.3 trillion yen breaks down to 17.7 trillion yen ($112 billion) in general account spending and 2.7 trillion yen ($17 billion) in tax cuts. Prime Minister Takaichi promised the package would boost Japan’s GDP by 24 trillion yen ($155 billion) annually—a 1.4% increase. The government plans to provide energy subsidies, lower gasoline taxes, and expand grants to local governments. But the timing couldn’t be worse. Japan’s economy contracted 0.4% in the third quarter, the first decline in six months. Inflation hit 3% in October, staying above the Bank of Japan’s 2% target for 43 straight months. The country now faces a dangerous squeeze: inflation hurting consumers while economic growth stalls. Yen Weakness Creates Market Chaos The stimulus announcement accelerated the yen’s decline against the dollar. The USD/JPY exchange rate climbed to 157.56 on November 20, with the yen weakening 3.7% over the past month. More concerning, Japanese government bond yields surged to historic levels. According to market data, the 40-year yield hit 3.697% immediately after the stimulus announcement, then climbed further to 3.774% on Thursday, November 21—the highest since the security launched in 2007. This…
Filed under: News - @ November 22, 2025 12:25 am