Bitcoin Reaches $81,000 on Dollar Weakness Amid Suspected Yen Intervention
Bitcoin surged past $81,000 as a suspected Bank of Japan currency intervention weakened the US dollar, reigniting market debates over global liquidity and potential carry-trade unwinds.
Bitcoin rallied 5 percent during US trading hours to reach $81,000. The surge coincided with the US Dollar Index falling to 99, driven by a strengthening Japanese yen.
The USD/JPY pair dropped to 155.4, down from 158.5 on Wednesday, amid suspected intervention by the Bank of Japan. Historically, a declining dollar index has provided upward momentum for digital assets.
This currency movement has revived investor concerns regarding a potential unwind of the yen carry trade. Market participants are now pricing in a near-certain shift in Japanese monetary policy.
Prediction market Polymarket shows the probability of a Bank of Japan rate hold has collapsed from 12 percent to 1 percent. Traders now assign a 98 percent probability to a 25-basis-point policy rate increase at the central bank's September 18 meeting.
Analysts note the rarity of such sharp currency moves. “In the last 24 hours, USD/JPY has dropped almost 2.5%, which doesn’t happen without any major intervention,” The Macro Paper wrote on X. The firm added that this mirrors the dynamic seen in the third quarter of 2024, when the central bank intervened and hiked rates simultaneously.
Despite unwind fears, some market figures view the intervention as a net positive for global liquidity. Arthur Hayes, chief investment officer of Maelstrom, has argued that the Foreign and International Monetary Authorities’ (FIMA) repo facility could supply Japan with dollar liquidity against Treasury collateral.
Such a mechanism would ease broader financial conditions. Although no funds have been drawn from the facility to date, Treasury Secretary Scott Bessent highlighted the possibility in late July.
