The United States has stepped in alongside Japan to defend the yen, a move that in the past might have rattled crypto markets, but this time Bitcoin is holding steady. U.S. Treasury Secretary
The United States has stepped in alongside Japan to defend the yen, a move that in the past might have rattled crypto markets, but this time Bitcoin is holding steady.
U.S. Treasury Secretary Scott Bessent said on Aug. 2 that the U.S. joined Japan in coordinated foreign exchange intervention last Friday, describing it as a step to counter "disorderly yen movements."
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Foreign exchange intervention is when governments or central banks buy or sell a currency to influence its value.
The USD/JPY pair, which measures how many yen one dollar buys, had nearly reached 164, the yen's weakest level since 1986, before rebounding to 156.5 today.
The Trump Administration delivers for America's trusted partners. Economic security is national security. And the U.S.-Japan alliance is built on both.Friday's coordinated foreign exchange actions countered disorderly yen movements. Treasury remains attentive and in close…
— Treasury Secretary Scott Bessent (@SecScottBessent) August 2, 2026
Writing on X, Bessent said the U.S. "will not hesitate to participate in further joint intervention," and added that Washington "strongly supports Japan's decisive market and monetary steps to correct the substantial undervaluation of the yen."
The Treasury remains in close contact with Japan's finance ministry and central bank, he said.
The nerves trace back to the "carry trade," a strategy where investors borrow yen at low rates to buy higher-yielding assets elsewhere. When the yen strengthens sharply, those trades unwind and investors sell risk assets to cover losses.
In August 2024, an unexpected Bank of Japan rate hike triggered exactly that, and Bitcoin fell from roughly $62,000 to $49,000 in a week, a drop of about 20%.
The BOJ held rates at 1% last week, with Governor Kazuo Ueda pointing to AI demand and yen weakness as forces pushing inflation above 2%.
Despite expectations that a stronger yen would drag Bitcoin down, Bitcoin's 52-week correlation with USD/JPY had reached -0.90, suggesting broad U.S. dollar strength, not the yen, was the bigger driver.
Japanese bond yields are still climbing, with the 30-year yield approaching 4%, yet Bitcoin has stayed relatively flat above $63,000.
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