Odaily Planet Daily report: The Japanese yen has recently strengthened continuously, putting downward pressure on the U.S. Dollar Index (DXY) and providing short-term support to dollar-denominated assets such as Bitcoin and gold. Data shows that the USD/JPY pair fell 1.4% to 156.40 today, following a 0.9% decline on Wednesday; the euro, pound, and Australian dollar all rose slightly against the dollar. As a result, the DXY dropped 0.4% to 99.22, nearing its 200-day moving average.
Analysis suggests that this trend typically benefits dollar-denominated assets like Bitcoin, while easing global financial conditions and boosting market risk appetite. However, if the yen appreciates too rapidly, this logic could quickly reverse.
Over the past decade, numerous investors have used low-cost Japanese yen to finance investments in stocks, bonds, and even cryptocurrencies. If the yen appreciates rapidly, a wave of unwinding in yen carry trades could trigger a sell-off in risk assets. When yen carry trades were unwound in August 2024, Bitcoin fell by approximately 20% within a few days.
Market expectations are rising that the Bank of Japan will raise interest rates from 1% to 1.25% on September 18, putting further upward pressure on the yen. Reports indicate that officials from the U.S. and Japan have previously taken action to address “disorderly yen movements.” Thus, a moderate appreciation of the yen currently benefits Bitcoin, but if it escalates into a rapid, disorderly surge, it could instead become a risk factor for BTC. (CoinDesk)