The United States and Japan carried out a coordinated yen-buying intervention on July 31 to August 1, marking the first joint operation of its kind since 1998. The yen, which was near a 40-year low of approximately 164 against the dollar, rallied to the 156-157 range after the intervention. US Treasury Secretary Scott Bessent confirmed the action and indicated that further joint interventions remain possible. Japan, the largest foreign holder of US Treasuries with over $1.1 trillion in holdings, raises concerns about carry trade unwinds, a scenario that played out in August 2024 when the Bank of Japan surprised markets with a rate hike, impacting Bitcoin. The broader macro picture remains unchanged, with the interest rate differential between the US and Japan staying wide.
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