Bitcoin and USD/JPY 52-Week Correlation Drops to -0.9, Challenging Carry Trade Logic

CoinFeed June 30 news, according to CoinDesk, TradingView data shows that the 52-week rolling correlation coefficient between Bitcoin and USD/JPY has dropped to -0.90, the most negative since the end of 2022, with about 81% of BTC's weekly volatility explained by USD/JPY movements. This negative correlation means BTC moves in sync with the yen against the dollar—rising or falling together. This data challenges the popular 'yen carry trade' narrative. Under traditional logic, a weaker yen (rising USD/JPY) should be accompanied by a BTC rally, while a stronger yen should trigger risk-off selling—when the Bank of Japan raised rates in July 2024, BTC fell from $65,000 to $50,000. However, the current -0.90 negative correlation suggests the opposite: if the BOJ intervenes to prevent yen depreciation, a stronger yen may actually provide support for BTC.