The Fed Could Print Trillions to Fix the Yen, and Bitcoin May Be the Biggest Winner – Arthur Hayes

TLDR

• The US and Japan are working together to strengthen the yen by using a Fed facility called FIMA to print dollars and buy yen
• The Bank of Japan cannot raise rates aggressively without crashing bond markets and triggering a global carry trade unwind
• Japan’s giant pension fund GPIF may be forced to sell US stocks and bonds and bring money home, threatening US markets
• If the Fed expands the FIMA program, it would grow the Fed’s balance sheet, which has historically driven Bitcoin prices higher
• Arthur Hayes is bullish on Bitcoin, Ether, and Ethena (ENA) as the top plays if dollar liquidity surges

The US and Japan appear to be working together to push the yen higher. US Treasury Secretary Scott Bessent has publicly called for expanding a Federal Reserve program that could allow Japan to swap its US Treasury holdings for dollars, then use those dollars to buy yen in currency markets.

Arthur Hayes: Fed-Backed Yen Rescue Could Fuel Bitcoin, Gold and Ether

BitMEX co-founder Arthur Hayes said the most likely path to a stronger yen is not aggressive Bank of Japan rate hikes or large-scale Treasury sales, but Japan using the Federal Reserve’s FIMA repo facility to… pic.twitter.com/tT0XDjjflH

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