🇺🇸🇯🇵 US just intervened to defend the yen for first time since 1998.
The move: yen hit a 40-year low of 163.99. US and Japan stepped in together. Yen jumped 3% in a day, the sharpest move in almost two years.
Bessent's own notepad, photographed at Camp House: "Buy JPY $5-10 bil." That's 6 to 12x the size of the 1998 intervention.
Why it matters: cheap yen funds a huge trade. Borrow yen, buy dollar assets, pocket the spread. A sudden yen spike forces that trade to unwind fast, and unwinding means selling whatever the borrowed money bought. Stocks. Bonds. Crypto.
Bitcoin fell toward $63K the same day.
This is the same mechanism that hit markets in August 2024. Same trigger, far more firepower behind it this time.
Watch USD/JPY at 158. If it holds above it, this was a one-day scare. but if breaks below and stays there, the unwind isn't done.
The move: yen hit a 40-year low of 163.99. US and Japan stepped in together. Yen jumped 3% in a day, the sharpest move in almost two years.
Bessent's own notepad, photographed at Camp House: "Buy JPY $5-10 bil." That's 6 to 12x the size of the 1998 intervention.
Why it matters: cheap yen funds a huge trade. Borrow yen, buy dollar assets, pocket the spread. A sudden yen spike forces that trade to unwind fast, and unwinding means selling whatever the borrowed money bought. Stocks. Bonds. Crypto.
Bitcoin fell toward $63K the same day.
This is the same mechanism that hit markets in August 2024. Same trigger, far more firepower behind it this time.
Watch USD/JPY at 158. If it holds above it, this was a one-day scare. but if breaks below and stays there, the unwind isn't done.