Going long the Japanese yen is the best trade on earth right now, because US Treasury Secretary Scott Bessent will step in to save it, with swap lines and similar measures. The yen's slide has become severe enough that Japan needs to raise rates. x.com  x.com 

The yen could see a violent short squeeze, as Treasury Secretary Scott Bessent claims asymmetric insight into Japan's next policy move and openly dared traders to short it, saying "I am the house now." If Japan tightens or intervenes again, unwinding the huge leveraged yen carry trade could force liquidations across stocks and crypto. @QmoCrypto notes Japan has sold about $71 billion of Treasuries while defending the yen. x.com 

The US dollar's strength against the yen is a trend, as the Bank of Japan neither wants nor dares to reveal its hand. It is avoiding a clear 160 line and instead trying hit-and-run moves against yen shorts, and it is unclear whether it will actually strike. There is little basis for a sustained yen rally; even if it intervenes, its realistic approach is to fight while retreating, unless Fed policy clearly pivots, and Fed chair Warsh does not seem to want to give markets a clear signal. x.com  … Show more

The yen is strengthening sharply toward ¥153-154 as the Bank of Japan hikes rates and intervenes, starting to unwind the global carry trade funded by cheap yen. That is not a normal FX move but a systemic margin call on every leveraged position funded in yen, with the BOJ now playing its own game rather than following the Fed. x.com 

The yen has another source of support because Treasury Secretary Bessent can use the Fed's FIMA repo facility against dollar-yen. Japan can pledge US Treasuries to the Fed for dollars and sell them for yen, without dumping Treasuries and pushing US yields higher. The facility's limit is reportedly $60 billion per counterparty, and Bessent has already advocated expanding it. x.com 

The Japanese yen is weakening again despite the coordinated Bank of Japan and US Treasury intervention, having given back about 38% of the manufactured gain. More government intervention looks likely soon as the currency slides. x.com  x.com 

Japan's intervention may mark a turn higher for the yen, but a surge like past appreciation periods is unlikely because there is no yen carry trade to unwind these days. Japan's near 5% of GDP current account surplus is also less structural than it looks: trade is near neutral, and the surplus comes from large investment income that is usually reinvested abroad automatically. x.com  x.com 

The yen looks set to strengthen sharply, with USD/JPY heading to 130. The call comes as hedge funds turned the most negative on the yen since 2007, per CFTC data cited by @financialjuice. x.com 

The yen's intervention-driven rally looks weak and likely to fade, with USD/JPY possibly back near 160 soon. The Fed's EUR/JPY sale came after 4pm on a dead July Friday, signaling weakness speculators will test. Japan is slow-walking supporting policy such as rate hikes or repatriation incentives, and Bessent wants a lower USD/JPY without the US asset drawdown repatriation brings. If USD/JPY fails to regain 160 soon, though, the yen could rally hard, with spec shorts at record extremes. x.com  … Show more

The yen is strengthening on a carry-trade unwind as markets price in a 50-basis-point BOJ hike. @VKMacro notes USD/JPY fell below 157 and held, something intervention could not achieve. Kevin Warsh's speech was an art-of-the-deal sleight of hand that fooled markets into seeing a hawkish Fed. Yen calls are working because volatility was too low for the coiled spring of carry leverage. x.com  x.com