The Japanese yen recorded its biggest daily gain against the US dollar after the USD/JPY pair reversed from a recent high near 164.00. This demonstrates that changes in the Japanese currency can impact global financial conditions and, specifically, bitcoin.
On the daily chart, the USD/JPY pair observed a reversal after rising to nearly 164.00 following a multi-month uptrend that began in May. Intense selling erased several days of gains, pushing the pair below 160.00 before buyers helped the dollar recover and close near 160.59.
Although the latest session formed a long lower shadow, indicating the emergence of demand at lower levels, the failed attempt to sustain above recent highs suggests weakening bullish momentum.
The yen strengthened by as much as 3%, causing the US dollar to fall to an intraday low of 158.34, though it recently traded near highs around 164 yen. According to analysts, the scale of this move, combined with the unusually high volumes of currency transactions reported by banks, resembles previous episodes of intervention.
In this situation, attention has shifted to the Bank of Japan's announcement and any forecasts regarding future interest rates. So far, hawkish signals could contribute to further yen strengthening.
A stronger yen may also create short-term selling pressure on bitcoin, especially if investors unwind carry trade positions funded by cheap yen borrowings. At the same time, if further yen strength lowers the yield on Japanese government bonds and improves global liquidity, financial conditions could become more favorable for risk assets over time.
Today, the price of bitcoin fell by 2.5% to $62,500, which may already signal the onset of investor selling.
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