The United States and Japan conducted their first coordinated currency intervention since 2011 on July 31. The operation is estimated at approximately 8.45 trillion yen, roughly 53 billion dollars, and pushed USD/JPY from near 164 down to the 156-157 range. The yen had been sliding to a 40-year low against the dollar, driven by interest rate differentials between the two countries. This intervention has revived fears of yen carry trade unwinding, a mechanism that contributed to a Bitcoin crash in August 2024. Crypto investors should watch the 155 level on USD/JPY, as a break below it would signal potential acceleration of deleveraging.
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