Coordinated intervention lifts JPY from near 38-year lows, renewing fears of yen carry trade unwinds impacting BTC.
The yen surged after the U.S. and Japan intervened in currency markets, pushing USD/JPY from nearly 164 to 156.5. The move revived concerns about yen carry trade unwinds pressuring risk assets like bitcoin, which fell 20% in August 2024 amid similar conditions.
Bitcoin’s 52-week correlation with USD/JPY reached minus 0.90, suggesting U.S. dollar strength, rather than the carry trade, may be the primary driver. The Bank of Japan’s August rate hike to 0.25% triggered a BTC drop from $62,000 to $49,000 as leveraged investors covered yen-denominated losses.
U.S. Treasury Secretary Scott Bessent confirmed the intervention, calling it a response to “disorderly yen movements.” The BOJ held rates at 1% last month, maintaining pressure on the yen’s valuation.