Yen Hits Four-Decade Low as BoJ Prepares to Tighten Monetary Policy

The Japanese yen has hit its weakest point since late 1986, trading at around 163.23 JPY per dollar.

This development is significant for crypto traders, as it may signal a shift in monetary policy from the Bank of Japan (BoJ), which could impact the carry trade and subsequently Bitcoin.

The carry trade involves borrowing cheap yen-denominated loans, converting them into dollars or other currencies, and investing in higher-yielding assets. However, when interest rates rise or the yen strengthens, traders must quickly unwind their positions by selling risk assets to pay back their loans.

Bitcoin tends to be disproportionately affected by this selling pressure due to its liquidity and volatility.