Yen Carry Trade Squeeze Hits Bitcoin as Japan's 2-Year Yield Surges

Japan's two-year government bond yield has hit its highest level in over 31 years, climbing to 1.746% on Monday.

This move is significant because it affects the cost of the yen carry trade, which has helped fund global risk assets, including Bitcoin (BTC).

The Bank of Japan (BOJ) lifted its policy rate to 1% in June, and longer maturities followed, with the 10-year Japanese government bond (JGB) yield now sitting near 2.93%.

Higher rates would normally support a currency, but instead, the yen weakened, trading at 160.16 per dollar on Friday and touching 160.20 again on Monday.

Tokyo deployed 15.4 trillion yen between July 30 and August 26, close to $97 billion, including a rare joint intervention with the United States on July 31.