The USD/JPY has dropped below 155, and many people think it's just a regular exchange rate adjustment. But if you hold crypto assets, this is far more complicated than it appears on the surface. It's like an invisible thread—one end tied to the traditional financial markets, the other directly impacting the profit and loss of your crypto holdings.

What's the root cause? To put it simply, the central banks of the US and Japan are playing completely different games. The Fed keeps interest rates at their highest in over twenty years and shows no sign of easing, while the Bank of Japan? It just crawled out of negative rates, moving as slowly as an elderly person crossing the street. When such a big interest rate gap appears, global capital immediately smells opportunity—borrowing cheap yen and investing it in higher-yield markets. This is the so-called "carry trade." How big is it? Big enough to affect the liquidity of the entire financial system.

**For the crypto market, this knife cuts both ways:**

When the yen is depreciating slowly, a weak yen can actually be a good thing. Japanese domestic investors, seeing their money lose value, naturally look for alternatives. Assets like Bitcoin become hedging tools, and buying pressure continues to come in. Moreover, a weaker yen often coincides with a rise in global risk appetite, benefiting high-risk assets across the board.

But the real killer is the other scenario—a sudden reversal.

If the Bank of Japan suddenly intervenes or shifts policy, the yen can surge in a very short time. Institutions relying on yen carry trades will instantly panic and be forced to unwind their positions—dumping all their assets to buy back dollars and repay their debts. At that point, the crypto market becomes the first domino to fall, and liquidity can dry up in an instant.

The transmission path is actually very clear: BOJ action → yen surge → global carry trades get liquidated → panic selling → crypto market bleeds.

So, at this point, it's not just about watching the charts. Keeping an eye on the USD/JPY exchange rate may be more useful than watching any technical indicators.