The Japanese yen has surged by more than 2% yesterday, while bitcoin and gold prices have shown a simultaneous upward trend. The strength of the yen is linked to the weakening of the dollar, which in turn positively affects bitcoin. However, if the yen rises too sharply, there are concerns that it could trigger carry‑trade unwinding, potentially leading to a wider decline in risk assets.
In recent three days, the dollar‑yen exchange rate has fallen about 1.4% to around 156.40 yen per dollar. This follows a 0.9% drop yesterday and two consecutive steep falls; over those two days the yen rose a total of 2.5%. The yen is showing strength while the dollar is broadly weakening. Against major currencies such as the euro and British pound, the dollar has fallen to about 99.22, and bitcoin has risen above $81,000.
The market’s focus is on the 200‑day moving average of the Dollar Index (DXY). With DXY trading near 99.2 and close to its 200‑day line, analysts suggest that a breach of this level could trigger further dollar declines. Since investors use this indicator to gauge long‑term trends, a move in this direction is likely to turn into real selling.
Dollar weakness is favorable for dollar‑denominated assets such as bitcoin. When the dollar falls, global financial conditions ease and risk appetite rises, which amplifies bitcoin’s reaction more strongly than the yen’s strength alone.
If the yen surges sharply, it could trigger unwinding of carry trades, potentially reversing the trend. A moderate rise in the yen is beneficial to bitcoin, but a rapid surge raises the possibility that unwind will lead to a broader decline in risk assets.
The Wall Street Journal has warned that a sharp rise in the yen would increase currency‑hedging costs and that if carry trades were unwound bitcoin could fall by more than 20%. With the Bank of Japan’s policy rate possibly rising, further yen strength becomes possible.
Ultimately, what matters in the bitcoin market is not just that the yen rises but how fast it rises. A moderate rise can support bitcoin through dollar weakness, whereas a rapid surge could trigger carry‑trade unwinding and potentially spread risk‑asset selling.