The US-Japan yen intervention poses fresh liquidity concerns as bond yields spike

Joint currency interventions in the yen by Japan and the US could ultimately benefit Bitcoin (BTC) and risk assets. 

Key points:

• The first joint intervention in the yen between Japan and the US since the late 1990s could set a precedent for future moves.
• A liquidity crisis tied to the yen carry trade poses questions for Bitcoin and risk assets as the two countries attempt a juggling act to stabilize the currency without impairing US Treasury markets.
• Japanese two-year bond yields rose above 1.57% on Monday.

Bessent signals new era of US yen involvement

Washington’s growing coordination with the Bank of Japan (BoJ) points to a potential boost in global dollar liquidity — even as it runs up against a yen carry trade unwind that could squeeze liquidity if it deepens further.

Last week, the US and Japan conducted a rare joint intervention to prop up the yen, which had slid to forty-year lows of 164 per dollar — the first of its kind…