U.S. Treasury Secretary Scott Bessent confirmed Sunday that America joined Japan in coordinated currency intervention on Friday. The USD/JPY pair reversed sharply from nearly 164, its weakest level since 1986, down to 156.5 by Monday morning.
"We will not hesitate to participate in further joint intervention," Bessent wrote on X, calling the move necessary to counter "disorderly yen movements." He added that the U.S. "strongly supports Japan's decisive market and monetary steps to correct the substantial undervaluation of the yen."
The intervention instantly revived memories of August 2024. Back then, when the Bank of Japan unexpectedly hiked rates to 0.25%, the yen surged and bitcoin collapsed from roughly 62,000 dollars to 49,000 in just seven days. Leveraged carry traders unwound positions across risk assets to cover losses, triggering a 20% crash.
This time looks different. Bitcoin's 52-week rolling correlation with USD/JPY has hit minus 0.90, revealing something unexpected: BTC was actually falling alongside a weakening yen, not a strengthening one. That's backwards from carry-trade logic. The data points instead to broad U.S. dollar strength as the real culprit pressuring crypto.
Japanese bond yields continue climbing regardless. The 30-year yield is approaching 4%, while bitcoin has stayed relatively flat above 63,000 dollars. The BOJ held rates steady at 1% last week, with Governor Kazuo Ueda citing AI demand and yen weakness as factors pushing inflation above 2%.
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