Yen Surge Tests Bitcoin Resilience
The yen surged by 3.7% in just three sessions without a confirmed rescue from Tokyo, falling from 160.39 to 154.50 against the US dollar.
This move is significant because it reminds investors of how a similar yen surge in August 2024 forced them to unwind cheap yen-funded trades and dump risk assets, including Bitcoin, which fell by as much as 20% that time.
This time around, however, Bitcoin held strong above $79,000, passing what some are calling an important stress test for the trade that hurt crypto badly last year.
The yen's strengthening is also putting pressure on Japan's foreign reserves, which fell by $94.6 billion in August to $995 billion, with a significant portion of those losses coming from selling short-dated US Treasuries to fund the defense.