The yen appreciated approximately 2.5% over two sessions, pushing the dollar lower with the Dollar Index (DXY) declining to 99.22 points, near its 200-day moving average. Bitcoin rebounded toward $78,800, supported by a weaker dollar and looser global financial conditions. However, this favorable dynamic relies on a fragile balance: a too-brutal yen appreciation could force investors to unwind their carry trade positions and trigger widespread market selloffs. In August 2024, a 12% yen rise over five weeks had sent Bitcoin plummeting from $62,000 to under $49,000 in just a few hours. The Bank of Japan’s decision on September 18, which could raise its rate from 1% to 1.25%, will be a key event to watch.
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