Japan's $35B yen intervention is back — and Bitcoin is in the crossfire.

Japan reportedly deployed roughly $35 billion in yen-buying intervention this week, pushing USD/JPY from a peak of 160.7 down to 155.5 — a move BOJ money-market data appear to confirm. If the Ministry of Finance's monthly release validates the size, it would rank as Japan's first official yen-support action in nearly two years and the second-largest on record.

The macro backdrop explains why this matters beyond FX desks. The BOJ held its policy rate at 0.75% on April 28 while the Fed held at 3.50%–3.75% a day later, leaving a roughly 275–300 basis-point spread that keeps yen-funded carry trades mechanically attractive. BIS data from the August 2024 episode estimated yen-funded carry positions at $250–500 billion. CFTC data from April 21 show leveraged funds still holding 148,717 short yen contracts on CME — gross shorts up over 16,000 week-over-week.

When yen shorts need covering, the…