Joint Yen Intervention Sets Stage for Dollar Liquidity Boost

The US and Japan have conducted their first joint intervention in the yen since 1998, selling euros to prop up the currency. This move has raised questions about its impact on Bitcoin and risk assets, as a liquidity crisis tied to the yen carry trade poses significant challenges.

Japanese two-year bond yields rose above 1.57% on Monday, indicating that low-interest-rate conditions are coming to an end in advance of market expectations.

The US Treasury Secretary Scott Bessent emphasized the importance of meeting with BoJ Governor Kazuo Ueda at the forthcoming G20 gathering of finance ministers in North Carolina at the end of August.

Bessent also drew attention to FIMA, calling for the facility to be expanded, which would provide dollars to foreign institutions without selling US Treasuries. This could increase dollar liquidity and benefit Bitcoin.