Arthur Hayes published a new essay this week arguing that the US Treasury and Japan’s Ministry of Finance have settled on a single method to strengthen the yen: running newly printed dollars through the Federal Reserve’s currency swap facility. Between Japan’s government and the GPIF pension fund, Hayes counts $1.373 trillion in US Treasury holdings that could theoretically flow through this mechanism, a sum he compares to the roughly $4 trillion the Fed printed during the COVID pandemic. The recent intervention burned through more than $100 billion while only pushing the yen up 5% for a few trading days, highlighting the current facility’s limitations. Hayes predicts that the more they print, the higher Bitcoin goes, and he identifies Ethereum and Ethena’s ENA token as undervalued bets.
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