The Yen Just Hit 40-Year Lows Against the Dollar Again — Here's Why Crypto Traders Are Watching the Bank of Japan
4h ago · 1 source
The Japanese yen has fallen to levels not seen in 40 years against the US dollar, with markets closely watching an upcoming Bank of Japan (BOJ) meeting on Friday for potential policy shifts. The extreme weakness in the yen is raising concerns about possible intervention and broader implications for global risk assets, including cryptocurrencies.
WHY IT MATTERS
Think of the Japanese yen like a pressure valve for global money flows. Japan has kept borrowing costs extremely low for years, which means investors can borrow yen cheaply and invest that money in higher-returning assets around the world — including crypto. This is called the 'carry trade.' When the yen is weak (like now, at 40-year lows), this trade is very popular and lots of money flows into riskier investments. But if Japan's central bank suddenly changes course and strengthens the yen, all those borrowed-yen trades can unwind fast, pulling money out of risky assets like Bitcoin. So even though this is a 'traditional finance' story, it directly affects how much money is flowing into — or out of — crypto markets.
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