Bitcoin has started 2026 on a fairly bullish note, trading past the $90,000 region, though it struggles to maintain this level after retracing from its all-time high of $126,000 reached in October 2025.
Investors face an additional factor in determining Bitcoin’s possible trajectory. The cryptocurrency has displayed an unprecedented correlation with the Japanese yen index (JPYX) since its October peak.
Correlation reaches record high
Bitcoin’s price movement has shown a striking correlation with the Japanese Yen Index (JPYX) since October 2025, with both assets moving in close tandem.
The correlation coefficient on weekly timeframes has reached an all-time high of 0.89, representing an 89% correlation. This surpasses the previous peak of 0.82 recorded in August 2022.
By the way, the intensification of this relationship began in October 2025, coinciding with Bitcoin’s peak at $126,000. Since then, both assets have moved largely in sync, with Bitcoin retracing to current levels around $90,000.
The JPYX is a synthetic benchmark created by Pepperstone to track the overall strength or weakness of the Japanese yen against a basket of major currencies, including USD, AUD, NZD, and GBP.
It exists as a contract for difference (CFD), meaning investors don’t hold actual yen.
Given this strong correlation, the index’s movement has become increasingly important in determining Bitcoin’s direction on the chart as the cryptocurrency attempts to regain ground above the $90,000 region.
Japanese bond market in focus
In the near term, the yen has shown signs of strengthening following news that the government will auction 700 billion yen worth of Japanese Government Bonds (JGBs), specifically 30-year bonds, to the market soon.
This development has affected the 10-year JGB yield, which slightly retreated from its 27-year high of 2.132% to 2.081%, according to Trading Economics.
Bond yields had been climbing to elevated levels as investors anticipated interest rate hikes from the Bank of Japan, particularly after hawkish comments from the central bank governor and concerns about substantial government spending plans.
The auction’s outcome will play a crucial role in determining the yen’s performance and, given the established correlation, could influence Bitcoin’s market behavior in the coming days.
Wage pressures complicate outlook
Weak wage growth has emerged as a complicating factor for Japan’s economic outlook. Real wages in the country fell by 2.8% in November 2025, according to the latest data.
With wages declining while prices rise, consumers face mounting pressure, and the central bank finds it harder to justify aggressive rate increases.
Markets now face conflicting signals.
Expectations of higher interest rates clash with signs of economic weakness. This tension has caused bond yields to pull back amid growing uncertainty.
For Bitcoin investors, the performance of Japanese bond yields in the coming days could provide crucial signals for the cryptocurrency’s near-term direction, given the assets’ historically strong correlation established since October.
Final Thoughts
- Bitcoin and the JPYX index display an 89% correlation, the highest level on record, as correlation intensified in October 2025 after BTC peaked at $126,000.
- An upcoming Japanese government bond auction and rising yields could influence both assets’ next moves.
