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Rising yen weakens the dollar, lifting bitcoin and gold

The Dollar Index slipped 0.4% to 99.2, after USDJPY fell 1.4% to 156.40, a shift that can support dollar-priced crypto and gold.

Reported · Written up by our desk · Market Structure

CoinDesk reports that a broad rise in the Japanese yen has driven a weaker US dollar, and that has coincided with higher prices for both bitcoin and gold. The outlet points to a correlation that runs through the US Dollar Index, a key gauge of the dollar versus major currencies.

The DXY was last at 99.2, testing its 200-day moving average near 99.1 after the yen strengthened as much as 2.5% over two days. Data cited from TradingView show USDJPY down 1.4% to 156.40, extending Wednesday's 0.9% drop, while EUR/USD, GBP/USD, and AUD/USD were slightly higher.

While a stronger yen is often treated as a risk-off signal, CoinDesk says the immediate effect appears to be dollar weakness, which tends to support USD-denominated assets like bitcoin and also eases broader financial conditions. The piece adds that if the DXY breaks below its widely tracked 200-day average, more dollar selling could follow through a feedback loop.

CoinDesk also cautions that the backdrop could flip if the yen rally accelerates, because yen-funded carry trades in stocks, bonds, and crypto have historically been unwound during disorderly yen moves. It notes that during the August 2024 yen carry trade unwind, bitcoin fell about 20% within days.

Latest closeGold $4,431.70 ▲1.9%|Bitcoin $81,004.44 ▲4.8%|EUR/USD 1.159 ▼0.1%

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