{"id":17134,"date":"2025-03-11T07:31:42","date_gmt":"2025-03-11T07:31:42","guid":{"rendered":"https:\/\/dogewisperer.com\/?p=17134"},"modified":"2025-03-11T07:31:42","modified_gmt":"2025-03-11T07:31:42","slug":"bitcoin-and-nasdaq-could-stabilize-as-bull-positioning-in-yen-appears-stretched","status":"publish","type":"post","link":"https:\/\/dogewisperer.com\/?p=17134","title":{"rendered":"Bitcoin and Nasdaq Could Stabilize as Bull Positioning in Yen Appears Stretched"},"content":{"rendered":"
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It may be a coincidence, but the recent decline in the Nasdaq and bitcoin (BTC) coincides with a sharp rise in Japanese government bond yields<\/a> and the strengthening of the safe-haven Japanese yen (JPY), reminiscent of the market dynamics seen in early August.<\/p>\n

There could be a causation here, as, for decades, the low-yielding yen propped up global asset prices. The ongoing rise in the Japanese yen may have had a hand in the recent risk aversion on Wall Street and in the crypto market.<\/p>\n

That said, the bullish positioning in the Japanese yen looks overstretched, with speculators holding record longs last week, according to the CFTC data tracked by MacroMicro<\/a>. Such extreme bullish positioning, representing a collective belief in a continued move higher in the asset, sets the stage for disappointment, following, which a mass unwinding of longs unfolds, leading to a quick bearish reversal.<\/p>\n

In other words, the yen’s rise could stall for now, offering relief to risk assets, including Nasdaq and bitcoin.<\/p>\n

“We are now cautious on chasing further JPY strength, given stretched speculative positioning as well as strong dip-buying appetite from the domestic community,” Morgan Stanley’s G10 FX Strategy team said in a note to clients late Friday.<\/p>\n

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Strategists explained that many Japanese investors use the Nippon Individual Savings Account (NISA) scheme to snap up foreign assets during risk-off, inadvertently slowing the pace of JPY appreciation. Additionally, the public pension system tends to go against the trend, rebalancing out of JPY assets.<\/p>\n

“Indeed, such scenario happened in last August after a sharp appreciation of the JPY and the pronounced sell-off in equities,” strategists noted.<\/p>\n

Let’s see if history repeats itself, triggering a renewed risk-on sentiment for Nasdaq and bitcoin. The USD\/JPY pair turned up following the July and early August slide to 140, eventually rising to 158.50 by January. BTC turned up as well from the early August crash to $50,000, rising to new record highs above $108,000 in January. <\/p>\n

At press time, bitcoin traded near $80,300, representing a month-to-date decline of nearly 5%, extending February’s 17.6% slide. At one point early Tuesday, prices dipped to $76,800, according to CoinDesk data.<\/p>\n

Meanwhile, USD\/JPY traded at 147.23, having put in a five-month low of 145.53 early Tuesday, TradingView data show.<\/p>\n

Temporary respite?<\/h4>\n

While the stretched bull positioning and institutional flows suggest relief ahead, these factors may do little to alter the broader bullish outlook for JPY, which is backed by a narrowing U.S.-Japanese bond yield differential.<\/p>\n

So, risk asset bulls need to be vigilant for signs of volatility in the yen and the broader financial markets.<\/p>\n

\"\"<\/p>\n

The chart shows the spread between yields on the 10-year U.S. and Japanese government bonds.<\/p>\n

The spread has narrowed to 2.68% in a JPY-positive manner, reaching the lowest since August 2022. Plus, it has dived out of a macro uptrend, suggesting a major bullish shift in the JPY outlook.<\/p>\n<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

It may be a coincidence, but the recent decline in the Nasdaq and bitcoin (BTC) coincides with a sharp rise in Japanese government bond yields and the strengthening of the safe-haven Japanese yen (JPY), reminiscent of the market dynamics seen in early August. There could be a causation here, as, for decades, the low-yielding yen […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":0,"footnotes":""},"categories":[2],"tags":[3,4,5],"class_list":["post-17134","post","type-post","status-publish","format-standard","hentry","category-news","tag-crypto","tag-doge","tag-news"],"_links":{"self":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/17134","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=17134"}],"version-history":[{"count":0,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/17134\/revisions"}],"wp:attachment":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=17134"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=17134"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=17134"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}