BitMEX co-founder Arthur Hayes says Japan could use Fed’s FIMA repo to strengthen yen, expanding dollar liquidity and lifting crypto assets.
BitMEX co-founder Arthur Hayes suggested Japan may use the Federal Reserve’s FIMA repo facility to support the yen, rather than hiking rates or selling Treasuries. The move would involve pledging USD 1.37 trillion in U.S. Treasuries held by Japan and its pension fund as collateral to access dollars, then selling those dollars to buy yen.
Hayes noted the current USD 60 billion counterparty cap could be raised, potentially expanding the Fed’s balance sheet. The resulting increase in dollar liquidity would likely benefit risk assets, particularly Bitcoin, gold, and Ether.
No immediate market reaction was reported, but the scenario hinges on policy coordination between the Fed and Bank of Japan.