Yen Surges Against Bitcoin & Dollar: Scott Bessent Foresees Bank of Japan Rate Hike Shockwave

Japan's currency flexes muscle as crypto and fiat rivals stumble.

### Yen's Perfect Storm

Scott Bessent's hawkish BoJ prediction sends traditional and digital markets scrambling. The yen's rally exposes Bitcoin's volatility—just when crypto bros thought fiat was dead.

### Rate Hike Domino Effect

A potential policy shift could drain liquidity from risk assets. Traders now face a trifecta: stronger yen, weaker dollar, and a crypto market that still dances to central bankers' tunes.

### Finance Never Changes

Wall Street 'macro geniuses' pivot from 'dollar supremacy' to 'yen renaissance' narratives—just in time to sell you their new JPY-denominated fund.

Risk-off ahead?

Traders have historically used the yen as a carry currency to fund purchases of assets in high-yielding economies. That is, they've exploited Japan's low interest rate to borrow yen and buy assets that give a higher return, profiting from the difference. As such, rallies in the yen often trigger fears of risk aversion in financial markets.

That may not be the case anymore, according to Marc Chandler, chief market strategist at Bannockburn Global Forex.

Risk-off is frequently the result of unwinding of funding trades, e.g. short yen, long Brazilian real (BRL). However, the yen may not be the most attractive funding currency at present.

"Not only is Swiss policy rate at zero, but JPY volatility is higher," Chandler told CoinDesk in an email.