I understand that Japan sells US debts in April! Arthur Hayes: Rise of the yen will drive Bitcoin to rise

According to data from the Japanese Ministry of Finance, private institutions, including Japanese banks and pension funds, sold $21.1 billion in long-term foreign bonds in two weeks in April, and many analysts believe a large part of them may be U.S. Treasury bonds or U.S. institutional bonds.

Is Japan selling US bonds crazy for the purpose of rebalancing the funds? Or is the yen arbitrage closing trading reopened? BitMEX founder Arthur Hayes happily said that this will drive a big rise in Bitcoin.

Japan sells U.S. bonds in April

Private institutions, including banks and pension funds, sold $17.5 billion in long-term foreign bonds in the week ended April 4, and sold $3.6 billion in the next seven days, according to the Financial Times.

This is one of the largest outflows in two weeks since 2005.

The public and private sectors of Japan hold US$1.1 trillion in US Treasury bonds, the country holding the most US Treasury bonds in the world, so its transactions are closely monitored and considered as agents for purchasing or selling US government debt.

When the U.S. bond yield rate soared, there was also news that China sold U.S. bonds and put pressure on the U.S., but there is no clear data to prove it.

Fund rebalancing operation?

Tomoaki Shishido, senior interest rate strategist at Nomura Bank, said a large proportion of the bonds sold in Japan may be U.S. Treasury or U.S. institutional bonds (mortgage-backed bonds secured by the U.S. government).

Some foreign bond sell-offs may be because Japanese pension funds are rebalancing, or because banks or life insurance companies are reducing interest rate risks.

In fact, with the asset allocation of general traditional funds that purchase six bonds and four stocks, now facing a sharp drop in the stock market, fund managers inevitably need to rebalance.

Because the stock market value declines rapidly than bonds, the proportion of six bonds and four may have become five bonds and five bonds. Managers are forced to sell bonds and buy stocks to regain the proportion of six bonds and four bonds.

Funds in the United States and even other countries will also face the same situation.

Yen arbitrage closing trading starts again?

Another possible reason is the closing of the yen arbitrage trade. In arbitrage trading, investors borrow funds in low-yield markets and bet on high-yield markets.

Due to the relatively low yield rate, Japan has become a common "financing" market for such transactions. This is also one of the reasons for the long-term depreciation of the yen.

Analysts say a partial sell-off by Japanese private investors could also be the result of Japanese banks' arbitrage strategies cancelled.

The US dollar against the Japanese Yen (USDJPY) recently fell below 140, close to last year's yen arbitrage closing low.

Arthur Hayes: Rise of the yen will drive Bitcoin to rise

BitMEX founder Arthur Hayes also posted on X a few days ago that the rapid rise in the yen due to the closing of US stocks and US bonds, which will drive a sharp rise in Bitcoin.

Hayes started buying at the bottom when Bitcoin was still at 76K on April 8, and later it was more optimistic that Bitcoin would quickly bid farewell to the price of 100,000, and everyone should seize the opportunity.

The above is the detailed content of I understand that Japan sells US debts in April! Arthur Hayes: Rise of the yen will drive Bitcoin to rise. For more information, please follow other related articles on the PHP Chinese website!