fed

$SOMI $ENSO
And yet, almost no one is paying attention.

I’m not talking about Trump tariffs.
I’m not talking about Gold and Silver hitting new highs.

For the first time in over a decade, the New York Fed is openly signaling intervention in the Japanese yen.

That is a big deal.

Japanese government bond yields keep pushing to extreme levels.
The Bank of Japan is still in a hawkish mode.
And the yen is falling continuously.

When bond yields rise, the currency usually strengthens.

In Japan, the opposite is happening.

That is a sign something is breaking, and investors are feeling pessimistic about Japan’s economy.

As we know, Japan’s poor economic condition is horrible for the global economy.

And it looks like US policymakers are finally taking this risk seriously.

The New York Fed’s comments suggest a shift. They are now willing to step in and support the yen.

Here is how this usually works.

To support a currency, a central bank uses its own money. They create or use reserves, sell their own currency, and use that money to buy the currency they want to protect.

In simple terms:
The US would sell dollars and buy yen.

That is why markets reacted fast.

The US dollar index just printed one of its weakest weekly candles in months.

Traders are already pricing in a potential dollar devaluation and a stronger yen.

This is not just about helping Japan.

A weaker dollar actually helps the US government.

When the dollar loses value, future US debt becomes easier to deal with. The government still pays the same number of dollars, but those dollars are worth less in real terms.

A weaker dollar also makes US exports cheaper for the rest of the world, which reduces the trade deficit.

So supporting the yen while letting the dollar weaken is not a loss for the US. It is a policy choice that benefits both sides.

But the biggest winners are not governments. They are asset holders.

When a reserve currency like the dollar is devalued, assets priced in that currency usually go up.

Stocks, real estate, metals, and other financial assets rise in nominal terms.

That is already visible.

Most major asset classes are at or near all-time highs.

The only market that is still lagging is crypto.

While stocks and other assets look stretched, crypto is still far below its previous highs.

It has not fully priced in the same level of currency debasement and liquidity.

That is where the opportunity forms.

If the dollar devaluation theme continues, investors will start rotating.

They will look at markets that are trading at a big discount, and crypto will look appealing.

And this is when capital will start rotating out of crowded trades and into the crypto market, setting up one of the best catch-up trades ever.
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