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Key Takeaways
- Yen intervention triggered a sharp but short-lived rebound from four-decade lows.
- The BOJ held rates at 1% while warning inflation could rise further.
- Japan’s corporate crypto trade is splitting as some firms buy while others sell.
Japan appears to have conducted yen-buying intervention in New York on Thursday, according to market participants, and the Bank of Japan (BOJ) held its benchmark rate at 1% on Friday in an 8-1 vote.
Together, the moves test the thesis that has drawn some Japanese-listed companies into crypto: that a weakening yen justifies holding Bitcoin and Ether instead of yen-denominated reserves.
Yen Surges 3.3% Before Retreating to 160.75
The yen jumped from around 162.80 to as high as 157.98 in roughly an hour late Thursday, a gain of as much as 3.3% and its largest single-day move since early 2023, pulling the currency off a four-decade low. By Friday morning in Tokyo it had slipped back to 160.75.
Market participants estimated the operation at ¥5 trillion to ¥10 trillion, roughly $31 billion to $62 billion, according to Rinto Maruyama of SMBC Nikko Securities. Finance Minister Satsuki Katayama declined to confirm it, saying only that authorities are “always ready to respond with a sense of urgency.”
The New York Federal Reserve, acting on US Treasury instructions, asked multiple banks for dollar-yen quotes on Thursday. Such rate checks typically precede intervention, and simultaneous engagement by US and Japanese authorities is rare. South Korea separately conducted dollar-selling intervention the same day.
BOJ Maintains 1% Rate as Inflation Pressures Build
The central bank kept its policy rate at 1%, with board member Hajime Takata dissenting in favor of a 1.25% hike. The BOJ had raised the rate from 0.75% in June.
Its outlook warned that core inflation is likely to accelerate to a level clearly above 2% from the second half of the 2026 fiscal year, citing wage increases passing into selling prices, higher crude oil prices and recent yen depreciation. Tokyo CPI excluding fresh food rose 1.9% in July from a year earlier, above expectations of 1.7%.
Japanese Companies Take Opposing Approaches to Crypto Reserves
Recent examples show a split among some Japanese-listed issuers, between those still building crypto positions and those reducing them.
Eole, an internet services group on the Tokyo Stock Exchange Growth market, disclosed on July 28 the purchase of about 1,078 HYPE tokens for roughly ¥10.08 million, or about $63,000, reportedly the first HYPE holding by a Japanese-listed company. The firm plans to accumulate up to ¥100 million by the end of August.
Moving the other way, Quantum Solutions sold 1,000 ETH for about ¥310 million through a subsidiary and raised its cumulative divestment ceiling to 4,375 ETH. Separately, a former director of nail salon operator Convano stepped down over losses on that company’s corporate Bitcoin position.
JPYC Offers an Alternative to Corporate Crypto Treasuries
A separate on-chain yen trend is also moving differently. JPYC’s market value rose between late June and late July, according to Token Terminal data, though other market-data providers show lower dollar market-cap figures for the token. The yen-denominated stablecoin is issued under Japan’s revised Payment Services Act framework.
The issuer earns from interest on reserve assets comprising Japanese government bonds and bank deposits rather than user fees. The 10-year JGB yield stood at about 2.76% in late July, near multi-decade highs and up from roughly 1.5% a year earlier.
Yen Positioning Leaves Crypto Exposed to Carry-Trade Reversal
Non-commercial yen short positions stood at 152,125 contracts as of July 21, according to CFTC data, near the July 2024 peak of 184,223. A rapid unwind of yen-funded carry trades in mid-2024 preceded a sharp sell-off in Bitcoin and Ether.
Takeshi Minami of the Norinchukin Research Institute said the intervention’s impact would not last, citing fiscal concerns rather than rate differentials as the main driver of yen weakness.
Prime Minister Sanae Takaichi indicated on Thursday a food consumption tax cut to 1% from 8% for two years starting April 2027, and the government removed spending ceilings on growth-sector and crisis-management investments in its fiscal 2027 budget.
