Bitcoin (BTC) traded at a slight premium in Japanese markets on Monday as the sliding yen (JPY) suddenly shifted gears and surged against the greenback, bearing all the hallmarks of currency intervention. central bank.
The bitcoin-Japanese yen (BTC/JPY) pair on major Japanese cryptocurrency exchange bitFlyer has been trading at a premium of around 0.2% to the dollar-denominated price of bitcoin on Coinbase (COIN) , listed on the Nasdaq, according to chart data from the TradingView show. CoinDesk reached out to bitFlyer for comment and was awaiting a response at the time of publication.
The leading cryptocurrency by market value has consistently enjoyed a premium in JPY terms in recent weeks. Earlier this month, the premium hit 1.49%, its highest level since March 2020, a sign that traders are diversifying into alternative assets to circumvent the yen’s volatility.
“Currently, the bitcoin premium in Japanese markets is hovering around 0.3% to 0.4%, having declined by more than 1% in mid-April and reached a yearly high of 1.7% in mid-April. -March. However, this could change. Overall, FX volatility is increasing due to increasingly divergent monetary policy expectations and geopolitical stresses, which could impact crypto,” said Dessislava Aubert, an analyst at Kaiko, based in Paris, at CoinDesk.
The yen swung wildly during a holiday-cleared Japanese trading session on Monday, initially sliding to 160 percent in points (pips) per U.S. dollar, the lowest in 34 years, only to rebound 500 pips to 155 pips per USD at the beginning of the European period. hours.
The speed and scale of the recovery has given rise to talk of intervention by the BoJ or a sale of dollars to set a floor under the yen. Local media neither confirmed nor denied rumors of BoJ action, saying weak liquidity conditions and caution over possible central bank action near 160 pips led to the yen’s sudden rise .
The yen is no longer favored by investors, with growing public debt preventing the Bank of Japan (BOJ) from aligning with US interest rates. In other words, Japan’s fiscal crisis played on the foreign exchange market.
The Federal Reserve (Fed) is expected to hold a policy meeting this week, during which it may emphasize the need to keep rates high at 5.25% for longer amid persistent inflation.
Last week, the BoJ kept its benchmark interest rate unchanged between 0 and 0.1%, after raising it above zero at the start of the year. The central bank has maintained ultra-accommodative monetary policy throughout the 2022-23 Fed tightening cycle, motivating traders to sell the yen.
