Bitcoin’s yen-denominated price on the Tokyo-based bitFlyer exchange dropped nearly 15%, significantly more than its dollar-denominated price on Western exchanges.

This was influenced by the yen’s sharp appreciation following Japan’s 0.25% interest rate hike.

The yen’s strong performance, rising almost 10% against the USD in three weeks, led to the unwinding of carry trades, contributing to the sell-off in risk assets, including bitcoin.

Bitcoin’s (BTC) yen-denominated price tanked nearly 15% on the Tokyo-based bitFlyer exchange, registering bigger losses than its dollar-denominated price, which fell 11%, on Western exchanges.

Trading volume on bitFlyer has surged 241% in 24 hours, topping the $220 million mark, according to Coingecko.

The steeper drop in yen terms stemmed from the Japanese currency’s sharp appreciation in the foreign exchange markets. Japan raised interest rates by 0.25% last week, leading to a strong yen and a corresponding drop across risky assets including bitcoin.

The rout deepened after Tokyo opened on Monday, with markets across Asia ending the day at a loss. Japan’s Topix 100 index recorded its worst session since 2011, and Nikkei 225 was down 12.4%. Meanwhile, crypto futures traders saw their worst day since March as liquidations on crypto-tracked futures crossed the $1 billion mark in the past 24 hours.

The Japanese currency has soared nearly 10% against the USD in three weeks, a staggering increase for the world’s third-biggest reserve currency and the one preferred by traders worldwide to fund purchases of risk assets.

The Bank of Japan raised rates last week, boosting the yen’s appeal and triggering the unwinding of carry trades. Some say this contributed to the start of a sell-off in risk assets. Carry is a trading strategy that involves borrowing an asset or currency at a low interest rate, such as the yen, and investing in an asset that provides a higher rate of return.

“The unwind of the carry trade is more a symptom of popular macro trades being taken off, as we have seen multi-sigma moves across asset classes, and hedge funds are forced to unwind positions for PNL protection,” Augustine Fan, head of insights at SOFA.org, told CoinDesk in a Telegram message.

“Japan has been a source of PNL income from USDJPY longs and Nikkei longs, so the unwinding of these main sources is likely to suggest very muted risk sentiment and risk appetite going forward,” Fan added.

Some remain optimistic, however, and suggest that the market could be making a local bottom in the coming days.

“The recent pullback resulted from the broader market tightening in Japan’s economic policies, where the central bank’s hawkish stance shifted to surprisingly raise interest rates,” Lucy Hu, senior analyst at Metalpha, explained in a Telegram message. “The bearish macro data in the U.S. sent investors worrying about a possible recession.”

“However, despite no formal confirmation of a rate cut by the Fed in Sep, the market has priced in the event and we should expect a rebound in BTC price when the macro environment improves,” Hu added.