America Broke a 28-Year Rule to Save the Yen and Bitcoin Felt It First
Bitcoin briefly broke below $63,000 on Friday, with the reason sitting 6,000 miles away. America bought Japanese yen for the first time in 28 years.
Washington almost never does this. The goal was to prop up a sinking currency. It also nudged one of the world's biggest funding trades. Crypto sits at the end of that chain.
What Actually Happened
The yen has been sliding for years. Last week it hit 163.99 per dollar, before extending lower this weekend. That was close to a 40-year low.
Japan moved first, on Thursday. It sold dollars and bought yen. That is called intervention. A government buys its own currency to push the price back up.
Washington joined on Friday. The New York Fed sold euros and bought yen for the Treasury. It used Goldman Sachs and Morgan Stanley, the Financial Times reported.
It worked, for now. The yen closed at 157.40 per dollar, its strongest since early May.
US Last Bought Yen in 1998
America stopped meddling in currency markets in the mid-1990s. Since then it has stepped in only three times. Those were 1998, 2000 and 2011, according to a Congressional Research Service briefing. Friday was the fourth.
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