Japan’s Ministry of Finance and the Bank of Japan intervened on July 30, driving a 3.3% yen surge against the dollar in a single session, with the intervention estimated at up to $59 billion. This move briefly brought USD/JPY from the 160-164 range down to 157-158. The fundamental problem persists: the interest rate gap between Japan at 1% and the United States at 3.75%, nearly 275 basis points, continues to fuel the carry trade. Speculative short positions on the yen had reached near-record levels before the intervention, and their unwinding could sustain upward pressure on the yen for days or even weeks. For cryptocurrency investors, this macroeconomic movement represents a risk of brutal deleveraging that could trigger liquidation cascades if positions are too leveraged.
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