Analyst Pushes Back on Claims That Japan Could Trigger a Massive XRP Rally

Renewed discussions around Japan’s monetary policy have sparked fresh optimism among XRP supporters, with some suggesting that a potential unwind of the Japanese yen carry trade could drive a major XRP price rally. 

However, XRP community commentator Eri believes that the narrative may be getting ahead of reality.

Eri’s Three Reasons for Doubting an Immediate XRP Surge

Eri pushed back on the idea that Japan’s monetary policy will trigger a near-term XRP rally, citing three key reasons.

First, she argued that the Bank of Japan’s tightening cycle has been extremely gradual. Interest rates have risen from around -0.1% in 2023 to just 0.75% by the end of 2025, giving institutions and leveraged traders plenty of time to adjust their positions instead of being forced into a sudden unwind.

Second, Eri says, the conditions for a major yen carry-trade shock are still some distance away. In her view, a more meaningful market stress event is unlikely until Japanese rates move closer to 1.5%, a level she estimates could still be 18 to 24 months away.

Third, she pointed to XRP’s liquidity limitations. Referencing comments from XRPL Foundation leader Brett Mollin, Eri noted that stablecoins such as USDT and USDC continue to dominate global settlement flows because they offer deeper liquidity and larger trading markets. As a result, she believes stablecoins, not XRP, remain the preferred bridge assets for many international transactions today.

Taken together, these factors lead Eri to conclude that expectations of a Japan-driven XRP price explosion may be overstated, even though she remains constructive on XRP’s long-term potential.

Institutions Continue Accumulating XRP

While Eri questions the yen carry-trade narrative, recent market activity shows that institutional interest in XRP remains intact.

XRP recently experienced a sharp selloff after a massive liquidation event wiped out leveraged long positions at a 16-to-1 imbalance. The move pushed the token below $1.25, triggering automated liquidations that quickly drove the price down to around $1.22. 

But while retail traders were panic-selling, institutions appeared to be buying the dip. U.S. spot XRP ETFs recorded $4.13 million in inflows on the same day, even as Bitcoin ETFs saw over $519 million in outflows.

The support level to watch now is the $1.20-$1.22 support zone. If institutional buying continues, XRP could stabilize and eventually recover toward $1.38. However, if broader market weakness persists, a possible move toward $1.00, with the lower Bollinger Band near $0.95 acting as a potential downside target.