Bitcoin was little changed over the past 24 hours after the United States and Japan stepped in together to support the yen, a rare move that put renewed focus on the role of cheap Japanese funding in leveraged trades across global markets.
Washington and Tokyo confirm joint yen buying
Japan and the United States said they bought yen on Friday after the currency weakened to 163.73 against the dollar. Bank of Japan data indicate Tokyo may have spent as much as $36.6 billion. The size of the U.S. contribution has not been disclosed.
After the intervention, the yen rebounded to 157.57 on Friday and held near 157 on Monday.
Why crypto traders watch the yen
Crypto markets keep a close eye on the yen because of the carry trade. Investors can borrow in Japan, where the policy rate is 1%, and move that money into assets with higher returns.
If the yen rises quickly, those trades can come under pressure. Traders may need to close positions and sell other assets to repay their loans.
Bitcoin shows limited immediate impact
That risk did not hit bitcoin right away. BTC traded near $63,600 on Monday, up about 1.8% over 24 hours and little changed over the past seven days.
Alvin Kan, chief operating officer at Bitget Wallet, said the intervention is better seen as a check on disorderly trading than the start of a lasting recovery in the yen.
The rate gap still favors the dollar. The Federal Reserve's benchmark range stands at 3.50% to 3.75%, compared with 1% at the Bank of Japan. Without a narrower gap, or investors unwinding yen-funded trades on their own, repeated intervention may do little more than slow the currency's decline.