The Federal Reserve issues a rare signal for yen intervention, a weaker dollar may boost Bitcoin

The yen has recorded its largest increase in six months, sparking speculation about possible coordinated intervention by Japan and the Federal Reserve. After Japanese Prime Minister Fumio Kishida warned of abnormal fluctuations in the yen, the dollar fell from nearly 160 to 155.6 against the yen, marking the strongest single-day gain for the yen in 2026.

The New York Fed has reportedly contacted major banks regarding the yen issue, which is often a precursor to coordinated currency intervention. Analysts point out that coordinated intervention could have effects similar to those in 2008, injecting significant liquidity into global markets. CFA Michael Gayed stated that a joint action by the U.S. and Japan could prevent the Bank of Japan from being forced to sell U.S. Treasuries while deliberately allowing the dollar to depreciate to support the yen.

A weaker dollar could boost global asset prices, including stocks, commodities, and cryptocurrencies. Bitcoin has a strong positive correlation with the yen and a negative correlation with the dollar. Previously, a slight interest rate hike by the Bank of Japan in August 2024 triggered a $15 billion sell-off in cryptocurrencies, causing Bitcoin to drop from $64,000 to $49,000.