Joint intervention by Washington and Tokyo to support the yen raises concerns over leveraged bets funded by low-cost Japanese borrowing.
Bitcoin traded steady at $63,600 on Monday after the U.S. and Japan intervened to prop up the yen, a rare coordinated move that stoked fears of forced unwinding in carry trades. Japan’s central bank may have spent up to $36.6 billion in the effort, though the U.S. contribution remains undisclosed. The yen rebounded from 163.73 to 157.57 per dollar on Friday and stabilized near 157 on Monday.
The intervention revived worries about yen-funded leveraged positions, where investors borrow at Japan’s 1% policy rate to buy higher-yielding assets. A sharp yen rally could trigger margin calls, forcing traders to liquidate positions. However, the interest-rate gap remains wide, with U.S. rates at 3.50%-3.75% versus Japan’s 1%.
Analysts said the move was likely aimed at curbing disorderly trading rather than signaling a sustained yen recovery. Bitcoin showed little immediate reaction, up 1.8% over 24 hours but flat over the past week.