THE YEN IS UP 2.5% IN TWO DAYS AND IT IS HELPING BITCOIN TODAY — THE LAST TIME IT MOVED LIKE THIS, BITCOIN FELL ABOUT 20% IN DAYS — JAPAN DECIDES SEPTEMBER 18
Here is the trade that has quietly funded everything for a decade. You borrow yen, because Japan charges almost nothing to borrow it. You take those cheap yen and you buy something that pays more — American stocks, American bonds, sometimes bitcoin. It works right up until the yen stops being cheap.
This week the yen rose as much as 2.5 percent in two days. The dollar index fell to 99.22 and is sitting right on its own 200-day line at 99.1. Both of those are helping bitcoin today, and bitcoin is up about 5 percent on the day. Enjoy it, but be clear about what it is. A softer dollar helps. A yen that moves too fast does not.
The Bank of Japan meets September 17 and 18 and announces on the 18th, and traders are now pricing a move from 1 percent to 1.25 percent. A quarter of one percent sounds like nothing. It is not nothing when the entire trade was built on borrowing being nearly free, and when everybody who borrowed yen to buy something else has to buy yen back to get out.
In August 2024 that unwind took bitcoin down about 20 percent in days. Nothing about bitcoin changed either time. What changed was the price of the money people borrowed to buy it. That is worth watching, and it has a date on it. Fundamentalist.
This week the yen rose as much as 2.5 percent in two days. The dollar index fell to 99.22 and is sitting right on its own 200-day line at 99.1. Both of those are helping bitcoin today, and bitcoin is up about 5 percent on the day. Enjoy it, but be clear about what it is. A softer dollar helps. A yen that moves too fast does not.
The Bank of Japan meets September 17 and 18 and announces on the 18th, and traders are now pricing a move from 1 percent to 1.25 percent. A quarter of one percent sounds like nothing. It is not nothing when the entire trade was built on borrowing being nearly free, and when everybody who borrowed yen to buy something else has to buy yen back to get out.
In August 2024 that unwind took bitcoin down about 20 percent in days. Nothing about bitcoin changed either time. What changed was the price of the money people borrowed to buy it. That is worth watching, and it has a date on it. Fundamentalist.
COINDESK Sep 3, 11:19 UTC (7:19 AM ET), updated 11:31 UTC · USDJPY −1.4% to 156.40, yen up as much as 2.5% over two days · DXY −0.4% to 99.22 against a 200-day at 99.1 · BOJ at 1%, 1.25% expected · meeting dates verified against the BANK OF JAPAN's own 2026 schedule (PRIMARY): Sep 17–18, decision on the 18th — we had said Sep 17 · Aug 2024 carry unwind and the ~20% bitcoin drawdown per CoinDesk · anchors: our BOJ JGB story Sep 2