Japan’s Yen Falls Again Despite $97 Billion Aid. Risk For Bitcoin?

Japan’s yen weakened again this week despite roughly $97 billion spent supporting it over the past month. Its slide puts renewed pressure on officials to act, with potential consequences for Bitcoin.

Why Japan’s Yen Rescue is Fading

The currency fell to 160.16 yen per dollar on Friday, 28 August, giving up more than half its gains since last month’s intervention. A weaker yen makes imports more expensive for Japanese households and businesses.

Japan spent ¥15.4 trillion supporting its currency between 30 July and 26 August. The campaign included rare joint action with the US on 31 July, when both countries bought yen to lift its value.

US interest rates remain higher than Japan’s, making dollar investments more attractive. The dollar gained further support this week when Federal Reserve chair Kevin Warsh pledged to bring inflation to target.

How a Stronger Yen Could Hurt Bitcoin

Bitcoin briefly fell below $77,000 after Warsh’s speech as investors expected higher US rates.

Japan could add to that pressure. Some investors borrow yen cheaply and use the money to buy investments elsewhere. This is known as the carry trade.

If fresh intervention or higher Japanese interest rates push the yen sharply upwards, those loans become more expensive to repay in other currencies. Investors may sell assets to cover their debts, potentially dragging Bitcoin lower.

This has actually happened before. Back in August 2024, the reversal of yen-funded trades amplified selling. Bitcoin and Ethereum suffered losses of up to 20%.

Metaplanet chief executive Simon Gerovich sees longer-term opportunity. Speaking in Hong Kong this week, he argued that Asian savers were ready to move beyond cash and embrace Bitcoin.

His company buys and holds Bitcoin, giving him a financial stake in that outlook. Such demand could grow over time. Bitcoin remains vulnerable to sudden market sell-offs.

“The buyers arriving now aren’t going anywhere. I believe the bottom is in. And I’m expecting a much brighter rest of the year,” Metaplanet’s CEO said.