fima

Japan and the U.S. have teamed up for the first time in 15 years to intervene in the yen—this is far more technically complex than it looks on the surface.

First, the data:
- USD/JPY is currently 156.46. On Thursday last week, Japan bought yen in a single day, with trading volume surging to the highest level in nearly 12 years
- Japan’s Ministry of Finance statement on August 1: if necessary, use the Federal Reserve’s FIMA standing repo facility
- U.S. Treasury Secretary Bessent said Sunday: he does not rule out further joint intervention and urged expanding the size of FIMA

What is FIMA? Technical breakdown:
A mechanism established by the Federal Reserve in March 2020—foreign central banks pledge U.S. Treasuries they hold to the Fed in exchange for dollar liquidity.
At its core: Japan doesn’t need to sell U.S. Treasuries to get dollars to prop up the yen.

Why is this detail so important?
Because Japan is the world’s largest holder of U.S. Treasuries (about $1.06 trillion).
If Japan were to sell U.S. Treasuries directly to obtain dollars for yen intervention, U.S. Treasuries would crash, yields would spike, and the global asset-pricing “anchor” would get thrown into chaos.
So the existence of FIMA = Japan can “pledge U.S. Treasuries to borrow money,” rather than “sell U.S. Treasuries.”

In one sentence: the Fed allows Japan to use U.S. Treasuries like toilet paper as collateral—and does not allow Japan to sell those Treasuries into the market.

What does this mean for the crypto market?

1. A portion of dollar liquidity is “locked”
The dollars Japan borrows are used to buy yen. That means there’s less dollars available in the market. Marginal tightening in dollar liquidity puts pressure on risk assets, so don’t expect BTC to surge in the short term.

2. Carry trades enter their “liquidation time”
The yen appreciates → carry-trade positions borrowing yen to buy U.S. Treasuries/ U.S. stocks/ BTC collectively close out. The script where BTC fell -20% in a single day on August 5, 2024 is still fresh—this time, it’s the U.S. and Japan officially stepping in and forcing the liquidation.

3. The biggest hidden risk: FIMA expansion = the printing press effectively starts up again
What Bessent wants to expand is nothing other than getting the Fed to accept more U.S. Treasuries as collateral and release more dollars. In the short term, it’s meant to save the yen; in the long run, it’s about extending the life of the global dollar system—an opening act for “debt monetization.”

Intel being singled out by Trump isn’t a coincidence—while intervening in the yen, they’re also giving a boost to domestic semiconductors. Politics and economics have never been separate.

Technical takeaways:
- Short term: marginal tightening in dollar liquidity + carry-trade unwind = downward pressure on BTC
- Medium to long term: expanding FIMA = an effective balance-sheet expansion = increased pressure for dollar depreciation = BTC’s fuel

The market always oscillates back and forth between “liquidity tightening” and “debt monetization,” and BTC happens to be the only intersection between these two forces.

#日元 #FIMA #BTC

US Treasury Secretary Bessent has been pretty busy these past two days—I dug into the details. Last week the US and Japan jointly stepped in to support the yen; it was the first time since 1998 that they jointly bought yen, and the first coordinated action between the US and Japan since 2011. When asked whether they would do it again, Bessent said there would be no hesitation, and if necessary they would continue to coordinate and intervene.

He also used the opportunity to call on the Fed to expand the pool under the FIMA repo facility. In plain terms, this is to ensure Japan doesn’t have to sell US Treasuries, while still being able to obtain dollar liquidity directly from the Fed.

When it comes to exchange rates, a single statement from the Treasury is more effective than a research report. $BTC is now at over 63,000, hovering with macro sentiment. $ETH is also stuck above the low thousands.

#贝森特 #日元干预 #FIMA