Core Insights - Bitcoin (BTC) and the Japanese yen (JPY) are both experiencing significant declines, with the yen down to 157.20 per U.S. dollar, prompting speculation about potential intervention from the Bank of Japan (BOJ) [1] - Historically, a weaker yen is associated with risk-on sentiment, as traders engage in carry trades by borrowing yen at low interest rates and investing in higher-yielding assets, which further pressures the yen [2] - The current low interest rate in Japan (0.5%) compared to the U.S. (4.75%) creates incentives for carry trades, with reports of Japanese investors seeking high-yield currencies like the Turkish lira [4] Economic Context - Japan's fiscal strain is contributing to yen volatility, with a debt-to-GDP ratio around 240%, raising concerns amid inflation and expansionary fiscal policies [6][7] - The Japanese government has approved a $135 billion fiscal stimulus package, indicating a trend towards increased borrowing and higher yields [7] - The 10-year Japanese government bond yield has risen to 1.84%, the highest since 2008, reflecting the impact of fiscal issues and inflation concerns [8]