The Japanese yen is closing in on its most depreciated stance against the US dollar in almost forty years, with the USD/JPY pair briefly hitting 160.80 and analysts eyeing a potential slide to 162. This trajectory would eclipse the low recorded in late 1986, positioning the yen near the 161.95 threshold that marks a historic weakness. Market participants are closely monitoring the level for signs of official intervention.
Yen Nears a Four‑Decade Low
Recent price action shows the yen edging toward a 40‑year trough, a development that could prompt the Bank of Japan to step in to stabilize the currency. If the pair breaches the 162 mark, historical precedent suggests a swift policy response aimed at curbing excess volatility. Such a move would have ripple effects across global foreign‑exchange markets.
Carry‑Trade Flows and Crypto Market Exposure
Japan’s traditionally low borrowing costs have fueled carry‑trade strategies, where investors fund yen‑denominated loans to chase higher yields in equities and crypto assets. As long as the yen stays weak, these flows tend to buoy risk‑on markets, providing indirect support for digital currencies. However, a decisive intervention could force traders to unwind positions, sparking heightened volatility across the crypto market.
XRP’s Deepening Links to Japan
Ripple’s native token, XRP, enjoys a robust partnership network in Japan, anchored by SBI Holdings and its subsidiary SBI Ripple Asia. The collaboration has expanded into blockchain bond projects, the upcoming XRP Tokyo 2026 initiative, and ongoing discussions about XRPL adoption and the RLUSD stablecoin. Continued yen weakness could amplify these connections, while any abrupt policy shift would introduce risk for XRP investors.