Japan’s Finance Minister Backs Crypto in Diversified Portfolios
Japan’s Finance Minister Katsunobu Kato said cryptocurrencies can form part of a diversified investment portfolio despite their high volatility. Speaking at an event in Tokyo, Kato emphasized that the government aims to foster crypto innovation without imposing excessive regulation. His comments come as Japan’s debt-to-GDP ratio exceeds 200%, raising concerns about financial repression and yen depreciation. Such repression—via low real interest rates, inflation and currency controls—erodes returns on traditional fixed-income and cash holdings. This environment could boost demand for alternative assets like crypto, which offer potential real returns and diversification benefits.
Bullish
An official endorsement by Japan’s finance minister reduces regulatory uncertainty and signals government openness to crypto innovation. Historically, supportive comments from senior policymakers—such as U.S. regulators approving Bitcoin ETFs—have led to price rallies and increased institutional interest. In the short term, this announcement may spark buying as traders anticipate policy tailwinds. Long term, it strengthens the narrative of crypto as a hedge against financial repression and currency depreciation, encouraging broader adoption and portfolio allocation.