US yen intervention puts Bitcoin, risk assets on notice for liquidity flux
Japan and the US have begun rare joint yen intervention, signaling tighter coordination between Washington and the Bank of Japan. That could support global dollar liquidity, especially if the Fed’s FIMA repo facility is expanded, which would let foreign institutions borrow dollars against Treasuries without forced sales. This is generally bullish for Bitcoin and other risk assets. At the same time, the move highlights a growing yen carry trade unwind. Japan’s higher bond yields, stronger fiscal spending, and possible BOJ policy normalization are making cheap yen funding less attractive. If Japanese capital is repatriated or Treasury sales accelerate, liquidity could tighten and borrowing costs could rise. Overall, the near-term effect may be supportive for markets, but the deeper risk is a disorderly unwind of yen-funded trades.
