The Japan’s yen is back in focus after it reportedly spent up to $59 billion in one day to support its currency. Now, the U.S. Treasury has warned major banks to stand ready for possible market intervention on Friday, a move that could also affect the dollar, Treasury yields and Bitcoin.
The U.S. Treasury, working through the Federal Reserve Bank of New York, has reportedly told several major banks to “stand ready for future action” in the foreign exchange market.
The warning comes just one day after Japanese authorities stepped in to support the yen.
Japan’s intervention is estimated at around $53 billion to $59 billion, making it one of the largest single-day currency interventions on record. The move helped the yen recover from levels near a four-decade low against the U.S. dollar. As of now, the yen is trading around 159.61 per dollar, up 0.06%.
The possible U.S. involvement adds another layer to the currency battle and suggests officials are becoming increasingly concerned about sharp moves in the yen.
U.S. Treasury Secretary Scott Bessent said the yen appears “very undervalued” and warned that excessive volatility is not healthy for markets.
Bessent also said the yen had moved well beyond what could be considered its normal or “equilibrium” value. His comments suggest the U.S. is focused less on forcing a specific exchange rate and more on preventing extreme currency moves from creating wider market problems.
The last time the U.S. Treasury directly intervened to support the yen was in 2011, when G7 countries acted together after Japan was hit by a devastating earthquake and tsunami.
The bigger question for crypto investors is what happens to the dollar and global liquidity if Japan continues selling U.S. Treasuries to support the yen.
Japan holds a large amount of U.S. government debt. If it sells some of those bonds to raise dollars for the intervention, heavy selling could put pressure on Treasury prices and influence bond yields.
At the same time, a weaker dollar could make Bitcoin more attractive to investors looking for alternatives to traditional dollar based assets.
If global liquidity improves and investors move away from cash and defensive assets, Bitcoin could become an early beneficiary.
A stronger BTC trend could then push traders toward Ethereum and smaller altcoins as risk appetite spreads across the crypto market.
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