Bitcoin has been showing a pronounced inverse correlation with the dollar-yen exchange rate over the past 52 weeks.
BTC’s price action has closely mirrored moves in the yen versus the U.S. dollar, typically declining as the Japanese currency weakens. This behavior challenges the conventional carry-trade narrative, which suggests that yen strength usually drives risk-off sentiment in crypto markets.
Data from TradingView indicates the 52-week rolling correlation between bitcoin’s USD price on Coinbase and the USD/JPY pair has fallen to -0.90, the ყველაზე negative level since late 2022.
Such a reading reflects a strong inverse relationship—bitcoin tends to drop when USD/JPY rises (yen weakens) and rise when the yen strengthens. Roughly 81% of BTC’s weekly price variation aligns with movements in the currency pair.
This dynamic undercuts the traditional carry-trade view, where a weaker yen is typically associated with gains in bitcoin and other risk assets. For years, traders have borrowed cheaply in yen to invest in higher-yielding markets.
Under that framework, a stronger yen should trigger deleveraging and a pullback in risk assets. That scenario played out in mid-2024, when the Bank of Japan raised interest rates, boosting the yen and sparking a broader market selloff. Bitcoin subsequently dropped from around $65,000 to near $50,000.
More recently, fears of a carry-trade unwind have resurfaced as the yen weakened to multi-decade lows, increasing expectations that the Bank of Japan may step in to support the currency.
However, based on the current correlation trend, any BOJ-driven rebound in the yen could actually help stabilize or even lift bitcoin, running counter to traditional expectations.
It’s important to note that correlation does not imply causation. The observed relationship does not necessarily mean bitcoin and the yen are directly influencing one another.
A more likely explanation is that broader U.S. dollar strength or weakness is driving both assets independently, creating the appearance of a tight inverse link.
Markets are now pricing in at least one 25 basis-point rate hike by the Federal Reserve this year. This hawkish shift—reversing earlier expectations for rate cuts—has strengthened the dollar against major currencies such as the euro, Australian dollar, and New Zealand dollar, as well as against commodities like gold and silver.
Given these dynamics, traders should be cautious about drawing firm conclusions based solely on the BTC/USD and USD/JPY correlation.
