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Yen surge gives Bitcoin a temporary boost
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Yen surge gives Bitcoin a temporary boost

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  • The Japanese yen strengthened as much as 2.5% over two days, weakening the US dollar.
  • Bitcoin and gold rose as the Dollar Index fell 0.4% to 99.22.
  • A faster yen rally could reverse the trend by triggering a carry-trade unwind.

The Japanese yen strengthened sharply, helping Bitcoin (CRYPTO:BTC) as broader US dollar weakness supported risk assets.

USD/JPY fell 1.4% to 156.40 after dropping 0.9% on Wednesday, according to TradingView data cited by CoinDesk.

The move pushed the Dollar Index 0.4% lower to 99.22, near its 200-day moving average of 99.1.

A weaker US dollar typically supports dollar-denominated assets such as Bitcoin and can ease global financial conditions.

However, a rapid yen rally could pressure Bitcoin if traders unwind yen-funded positions across stocks, bonds and cryptocurrencies.

Bitcoin fell about 20% within days during the August 2024 yen carry-trade unwind, showing the potential downside from a disorderly move.

Traders are pricing a higher chance that the Bank of Japan raises rates from 1% to 1.25% at its September 18 meeting, which could further support the yen.

At the time of reporting, Bitcoin price was $80,863.25.

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