Bitcoin Trades at a Small Premium in Yen Terms Following Suspected BOJ Intervention

Bitcoin (BTC) was trading at a slight premium on Japanese markets on Monday as the yen (JPY) suddenly strengthened against the dollar, showing signs of central bank intervention.

The bitcoin-japanese yen (BTC/JPY) pair on leading Japanese crypto exchange bitFlyer was trading at approximately a 0.2% premium to bitcoin’s dollar-denominated price on Coinbase (COIN), according to data from TradingView. CoinDesk reached out to bitFlyer for comments but had not received a response at the time of press.

Bitcoin has consistently been trading at a premium in JPY terms in recent weeks. Earlier this month, the premium reached as high as 1.49%, the highest since March 2020, indicating that traders are turning to alternative assets to avoid yen volatility.

According to Dessislava Aubert, an analyst at Kaiko, the bitcoin premium on Japanese markets is currently around 0.3%-0.4%, down from over 1% in mid-April and a peak of 1.7% in mid-March. She noted that the increasing FX volatility due to diverging monetary policy expectations and geopolitical tensions could impact the crypto market.

The yen experienced significant fluctuations in the Japanese trading session on Monday, initially dropping to its lowest level in 34 years before bouncing back significantly against the USD.

Speculation arose that the Bank of Japan (BOJ) may have intervened or sold dollars to support the yen. Local media did not confirm these rumors but suggested that low liquidity conditions and caution around central bank actions near specific levels led to the yen’s sudden surge.

In the FX market, Japan’s fiscal crisis has resulted in the yen losing favor among investors as the Bank of Japan struggles to match U.S. interest rates.

The Federal Reserve (Fed) is set to hold a policy meeting this week, where they may emphasize the need to keep rates elevated amid persistent inflation.

Last week, the BOJ kept its benchmark interest rate unchanged at 0-0.1%, maintaining an ultra-loose monetary policy compared to the Fed’s tightening cycle. This disparity has led traders to sell the yen in favor of other currencies.

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