📈 Japanese 🇯🇵 Yen 💹 in Turmoil? Crypto on Edge

Good Morning!

Last week's market panic? Ancient history. Fresh US data quashed recession fears, cooling expectations for aggressive Fed rate cuts. Japan's Nikkei surges, eyeing its best week since 2020. The yen's wild ride has traders rethinking strategies. Europe's poised for a strong open, with UK retail sales in focus. Meanwhile, the RBA stands firm on rates, bucking the global easing trend.

In today’s email:

• JPY 🇯🇵: On a wild ride

• Bitcoin: Bitcoin barely holding onto $58k mark going into a major options expiry

• Korea 🇰🇷: NPS buys $34M of MSTR

• BitVM2: Turbocharges Bitcoin 🚀

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THE BIG IDEA

The yen's wild ride - from weakling to potential powerhouse, leaving traders on edge

The yen's been on a rollercoaster that'd make even the most seasoned trader queasy. For two years, it's been the punching bag of the currency world, with speculators betting against it like there's no tomorrow. But just when everyone thought they had Japan's currency figured out, the Bank of Japan threw a curveball that's got the financial world buzzing.

Picture this: the yen, once slumping to four-decade lows, suddenly transformed into a financial Godzilla. The BOJ's surprise rate hike on July 31 wasn't just a nudge - it was a full-blown earthquake in the forex world. Carry traders, those clever folks borrowing cheap yen to invest elsewhere, suddenly found themselves in a game of high-stakes musical chairs. When the music stopped, the yen surged, sending shockwaves through Tokyo's stock market and beyond.

But here's where it gets really interesting

Some market wizards, like the folks at Nomura, are already whispering about the next plot twist. Could we see the Japanese government selling yen to keep it from getting too strong? It sounds crazy, but in the topsy-turvy world of forex, yesterday's weakness can become tomorrow's strength in the blink of an eye.

This isn't just about numbers on a screen. The yen's dance affects everything from your sushi prices to global trade flows. And with a new Japanese PM on the horizon and the Fed potentially easing up, the stage is set for more drama.

Meanwhile, hedge funds are eyeing the yen like a cat watching a particularly juicy mouse. They're sniffing out the potential for a comeback of the infamous yen carry trade. It's a high-wire act that could flood emerging markets with cash or lead to a spectacular wipeout if the yen suddenly flexes its muscles.

As we hurtle towards 2025, one thing's for sure - the yen's story is far from over. Whether it'll be the comeback kid or the fallen hero remains to be seen. But for traders, policymakers, and anyone with skin in the global economic game, it's a narrative that's impossible to ignore. So buckle up, because in the world of forex, the only constant is change - and the yen's just getting started.

MARKETS AT A GLANCE

TOP NEWS

Powell's Jackson Hole speech to guide Fed's economic stance and rate decisions

Fed Chair Powell's upcoming Jackson Hole address is the hot ticket in finance. He'll likely spill the tea on the U.S. economy and potential rate cuts. Recent data's a mixed bag – weak jobs, strong retail. Markets have cooled on hopes for a big rate slash, now eyeing a modest quarter-point cut. All eyes on Powell to see if he'll stay the course or throw a curveball.

China's bond market signals economic worries, challenging PBoC's policies

China's plummeting bond yields are ringing alarm bells. The PBoC's fighting to keep them up, but it's not about financial stability - it's a red flag for the economy. With deflation looming and weak alternatives, investors are piling into bonds. It's a clear vote of no confidence in current policies. Beijing needs to act fast with effective reflationary measures before it's too late.

Oil prices set for weekly gains despite Friday dip, buoyed by US economic optimism

Oil's on track for a second week of gains, despite a slight Friday dip. Brent and WTI are up about 1.3% and 1.2% respectively for the week. Strong US retail sales and job data fueled demand optimism. Geopolitical tensions add support, while Chinese refinery slowdowns cap gains. OPEC's trimmed demand outlook, citing softer Chinese expectations, adds complexity to the market picture.

CRYPTO

Bitcoin braces for volatility as $1.4 billion in options expire, testing $56k support

Bitcoin's hovering around $56k, a crucial support level, as $1.4 billion in options contracts approach expiry. The market's on edge, with the max pain point at $60k. Recent price dips and ETF outflows hint at bearish pressure, but favorable macro conditions could reignite demand. All eyes are on the 8:00 A.M. UTC expiry, which could set Bitcoin's short-term direction.

Nasdaq ISE withdraws proposals for Bitcoin and Ethereum ETF options trading

Nasdaq ISE has pulled back proposals to list and trade options on spot Bitcoin and Ethereum ETFs. They're not alone - other exchanges like MIAX and BOX have made similar moves. However, Cboe's re-filing after withdrawal hints at potential SEC engagement. Despite the setbacks, analysts expect exchanges to refile soon, keeping the crypto options market buzz alive.

World's 3rd largest pension fund buys $34M in MicroStrategy shares, increasing crypto exposure

South Korea's National Pension Service has snagged $34 million worth of MicroStrategy shares, boosting its crypto portfolio. The fund already holds stakes in Coinbase, Roblox, and Block. MicroStrategy's stock has soared 92.5% this year, hitting a 24-year high. The company's Bitcoin holdings now total 226,500 BTC, worth about $13.19 billion, cementing its position as the top public Bitcoin holder.

BitVM2 turbocharges Bitcoin, promising a programmable revolution without changing its DNA

Hold onto your crypto wallets! BitVM2 just dropped, and it's not your grandpa's Bitcoin upgrade. This bad boy compresses entire programs into Bitcoin transactions, verified in just three on-chain moves. The kicker? Anyone can play crypto detective and challenge fishy transactions. No core code changes needed – it's like giving Bitcoin superpowers without the radioactive spider bite. Rollups, bridges, and a whole new Bitcoin playground are suddenly within reach.

GOLD

Gold's quiet rally defies skeptics, fueled by central banks while investors lag behind

Gold's hitting all-time highs, but where's the fanfare? This stealth rally's got skeptics scratching their heads. They're crying "overcrowded trade," but the data tells a different story. ETF holdings are at 2013 levels, and futures positioning's just playing catch-up. The real gold rush? It's the central banks, gobbling up bullion while investors snooze. This isn't your grandpa's gold boom – it's a silent revolution in precious metals.

DAILY ECONOMIC CALENDAR (ET)

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