The stability of a significant global currency is currently uncertain, and this instability is having immediate repercussions for Bitcoin.
A recent report from Bloomberg highlights the possibility of a coordinated intervention by the Federal Reserve to stabilize the currency. Following a routine rate assessment by the New York Fed—often an indicator of impending market actions—the Japanese yen experienced a notable increase, rising 3.39% from its low last Friday. It now stands at 153.95 yen per dollar, reaching levels not observed since early November 2025.
This development is crucial as a stronger yen could disrupt one of the most widespread investment strategies globally, which would directly affect liquidity that has supported risk assets like Bitcoin for years.
This situation arises after Japan faced significant market turbulence last week, leading to a sharp decline in bond prices and pushing the yield on its 40-year government bonds up to 4%, marking levels not seen since their introduction in 2007.
In this delicate macroeconomic landscape, Bitcoin’s movements are increasingly influenced by traditional financial flows. The cryptocurrency has struggled to gain traction amid changing policies and geopolitical tensions; it has only managed a modest year-to-date increase of just 0.14%, according to CoinGecko data, while gold and silver have surged to new heights.
The Impact of Yen Intervention on Global Carry Trade
For many years, Japan’s near-zero interest rates have been instrumental in driving what’s known as “carry trade,” where investors borrow inexpensive yen to invest in higher-yielding assets overseas—including U.S. stocks and Bitcoin.
If there’s depreciation in the yen’s value, these trades appear more lucrative on paper; however, if there’s an abrupt intervention aimed at strengthening it—such as selling dollars for yen—it can trigger swift reversals.
This scenario directly affects Bitcoin because its short-term valuation largely hinges on leveraged capital movements; Tim Sun from HashKey Group explained this dynamic during an interview with Decrypt.
Investors may be compelled to liquidate riskier assets like Bitcoin so they can repurchase yen needed for loan settlements—this creates substantial selling pressure across markets.
“Heightened expectations regarding intervention have significantly increased volatility premiums,” Sun noted. “This situation consequently leads capital away from Bitcoin.”
The anticipation surrounding potential rate checks by NY Fed raises concerns about collaborative interventions that might involve printing U.S. dollars specifically aimed at stabilizing declines in Japanese currency value.
This backdrop elucidates recent sell-offs within both crypto markets and equities coinciding with gains made by the yen against other currencies.
Short-Term Challenges vs Long-Term Opportunities
“Rising expectations regarding intervention have significantly increased volatility premiums,” Sun noted.
“This situation consequently leads capital away from Bitcoin.”
However,Sun cautioned that current impacts are unlikely surpass those events due lower overall risk appetite among leveraged traders compared previous instances occurring back then!
Short-term Pain versus Long-term Tailwinds
Inevitably paving way sustainable rally requiring “decline FX volatility coupled USD weakening” affirming structural shift favoring broader easing measures historically acting beneficially scarce hard money assets such BTC!
– Arthur Hayes former CEO BitMEX tweeted Saturday highlighting scenario “extremely bullish” suggesting if true implies Fed manipulating b/s through foreign asset purchases reflected weekly H4 releases!
“Assuming prints dollars creates reserves sold buyback Yen.” – Arthur Hayes (@CryptoHayes) January23rd2026<
This perspective continues gaining momentum: the immediate discomfort stemming unwind carry trades may soon transition into robust rotation towards investing BTC seeking hedge against deliberately diluted US Dollar until pivot occurs expect pressures persist!” concluded Tim Sun emphasizing need stabilization alongside fully pricing out risks involved interventions!