🚨 JAPAN JUST STEPPED IN — AND THE MARKET IS NOT READY

The Bank of Japan has begun currency intervention while USD/JPY sits near 160, a level we haven’t seen in 40 years. This isn’t just another number on a chart. For Japan, 160 is the pain point the level where talk ends and action begins. Every serious market maker knows it. When price trades here, things can move fast and messy.

What most people are missing is the connection behind the scenes. Japan is the biggest foreign holder of U.S. Treasuries, about $1.2 trillion.

To defend the yen, they have to sell dollars and buy yen. Those dollars come from reserves, and a big chunk of those reserves are U.S. bonds. So this stops being an FX story very quickly it turns into a U.S. Treasury and global liquidity story.

And when Treasuries feel pressure, everything else follows. Yields jump, funding gets tighter, risk appetite disappears.

The chain reaction is always the same: bonds crack first, stocks react after, and crypto takes the hit the hardest and the fastest. Add in the stress already showing in Japan’s bond market, and it’s clear this isn’t a healthy backdrop.

The real risk is that markets aren’t pricing this yet. Volatility is calm, positioning is crowded, and everyone feels comfortable — which is usually when surprises hurt the most. I’ve been studying macro for 10 years and called most major tops, including the October BTC ATH. The real warnings show up before they hit the headlines.