Weakened Yen Sparks Fears for Bitcoin as $97 Billion Aid Package Fails

Japan's yen has fallen to a new low despite a massive $97 billion aid package. The currency hit 160.16 yen per dollar on August 28, giving up more than half its gains since last month's intervention.

The weakness of the yen makes imports more expensive for Japanese households and businesses, putting renewed pressure on officials to act.

US interest rates remain higher than Japan's, making dollar investments more attractive. The Federal Reserve chair Kevin Warsh pledged to bring inflation to target, further supporting the dollar.

If fresh intervention or higher Japanese interest rates push the yen sharply upwards, investors may sell assets to cover their debts, potentially dragging Bitcoin lower.