Discussions surrounding the possibility that Japan's monetary policy could trigger a surge in XRP prices have recently intensified again. Foreign media, citing XRP community commentator Eri, argue that this assessment is premature and is unlikely to escalate into a large-scale price movement in the short term.
Japan's interest rate hike pace remains slow.
Eri's first reason is that the Bank of Japan's tightening policy is not proceeding rapidly. She noted that Japanese interest rates rose slowly from approximately -0.1% in 2023 to 0.75% by the end of 2025. For institutional and leveraged traders, this means the market has had time to gradually adjust its positions, rather than being forced to liquidate positions all at once in a short period.
Eri also believes that interest rates may need to continue rising for the yen carry trade to experience a more significant impact. She judges that a larger stress test is more likely to occur when Japanese interest rates approach 1.5%, which is still 18 to 24 months away.
Stablecoins still dominate cross-border settlements
She also pointed out that XRP's liquidity in global settlement scenarios is still inferior to that of mainstream stablecoins. Eri quoted Brett Mollin, head of the XRPL Foundation, as saying that USDT and USDC continue to dominate because of their higher trading depth and larger market size.
Against this backdrop, stablecoins remain the more common bridging asset in many international transfer and settlement scenarios. According to her assessment, there isn't a sufficiently direct short-term transmission between changes in Japanese policy and the price of XRP; therefore, the claim that "Japan drove the XRP surge" has been exaggerated.
Institutional buying emerged after the pullback.
Despite Eri's reservations about this path, recent market data still shows that institutional interest in XRP has not disappeared. XRP previously fell rapidly after a large-scale liquidation, with long leveraged positions being squeezed, and the price once fell below $1.25, dipping to around $1.22.
- XRP short-term focus range: $1.20 to $1.22
- Net inflow into the US spot XRP ETF: $4.13 million
- During the same period, Bitcoin spot ETFs saw net outflows exceeding $519 million.
However, while retail selling intensified, institutional funds flowed in. If buying continues, XRP prices have a chance to stabilize in the current range and gradually return to around $1.38; if the overall market continues to weaken, prices may fall further to the $1 level.
