Why Bitcoiners should care that Washington joined a $96B yen rescue to shield over $1 trillion in US Treasuries
The United States joined Japan’s effort to support the yen after preliminary central-bank data indicated Tokyo may have deployed almost $96 billion over two days, putting Bitcoin traders on alert for a possible unwind of positions financed with cheap Japanese capital.
On Aug. 3, Japan’s Ministry of Finance confirmed that it purchased yen in coordination with the US Treasury on July 31 to counter months of “excessive volatility and disorderly movements.”
According to Reuters, the Bank of Japan may have spent as much as $58.97 billion during an initial intervention last Thursday and another $36.58 billion during last Friday’s coordinated operation with the United States.
The operation marked Washington’s first coordinated yen-buying intervention with Japan since 1998. It was also the Treasury’s first foreign-exchange intervention since 2011, when the Group of Seven acted in the opposite direction by selling yen after the earthquake and Fukushima nuclear disaster.
The current intervention lifted the yen from a 40-year low near 164 per dollar to 155.20 on Monday. It gave back part of that gain on Tuesday, weakening to about 157.8 as traders assessed whether the United States and Japan would intervene again.
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