1 month ago
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Key Takeaways
- For Bitcoin, how Japan strengthens the yen may matter more than the currency move itself.
- Hayes’s scenario relies on an existing Fed facility, but would require much larger and more persistent use than seen today.
- Japan’s enormous foreign-asset holdings overstate the amount that could immediately enter the Fed’s FIMA framework.
- The thesis becomes actionable only if Fed policy changes are followed by visible growth in foreign-official repo balances.
A Stronger Yen Can Reach Bitcoin in Two Ways
Hayes is looking at a familiar yen problem from a different angle.
In his August 11 “Yen-quake” essay, Hayes argues that Japan could support its currency without forcing the Bank of Japan into an aggressive tightening cycle. His alternative runs through the Federal Reserve’s Foreign and International Monetary Authorities, or FIMA, Repo Facility.
Hayes distills the Bitcoin implication into one line: “The more they print, the higher Bitcoin goes.”
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