Bitcoin and gold moved higher as the yen strengthened sharply against the dollar, helping push the U.S. dollar lower across global markets. BTC was quoted at $78,535.67, with the move challenging the traditional view that yen strength signals broad risk aversion. The key driver was the yen’s impact on the dollar index, as a weaker dollar tends to support dollar-denominated assets such as Bitcoin and ease overall financial conditions.
Markets are also watching the risk of a reversal if the yen rises too quickly in a disorderly move. Over the past decade, traders have widely borrowed low-cost yen to fund positions in equities, bonds, and cryptocurrencies. A sharp surge in the yen could force a large-scale unwind of those carry trades, prompting investors to cut risk positions and increasing pressure on global risk assets.
Yen Strength Lifts Bitcoin as Dollar Weakens, but Carry Trade Unwind Risk Looms
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