Yen Rescue Could Fuel Bitcoin Rally, Says BitMEX Co-Founder Arthur Hayes

Arthur Hayes, co-founder of BitMEX and macro commentator, believes that a potential rescue of the yen could fuel a bitcoin rally. In his essay 'Yen-quake,' Hayes argues that the dollar-yen exchange rate has become a problem for both Washington and Tokyo. He identifies three mechanisms to strengthen the yen: aggressive interest rate hikes from the Bank of Japan, a shift by Japan's Government Pension Investment Fund (GPIF) away from overseas assets, or Japan's Ministry of Finance pledging U.S. Treasuries to the Federal Reserve in exchange for dollars.

The third mechanism, tapping the Fed's Foreign and International Monetary Authorities (FIMA) repo facility, could spike U.S. bond yields, according to Hayes. He notes that FIMA lets foreign central banks temporarily exchange their U.S. Treasury holdings for dollars through the Federal Reserve, rather than selling those Treasuries outright.

Japan holds roughly $1.143 trillion in U.S. Treasuries and the GPIF holds another $230 billion, which Hayes believes could be pledged through the facility. However, there's a catch - FIMA's per-counterparty cap is currently set at $60 billion, but Treasury Secretary Scott Bessent has hinted that this limit may rise.

Hayes points to recent comments about expanding FIMA repo limits and a coordinated foreign-exchange intervention as evidence policymakers are already moving in this direction. He postures the setup as a modern echo of the 'Plaza Accord' era, when coordinated intervention reshaped the dollar-yen relationship.