Arthur Hayes points to coordinated government intervention to address yen appreciation and the possibility of raising the FIMA facility’s cap. He says expanded dollar liquidity could become a driver of Bitcoin’s rise.
Arthur Hayes, BitMEX co-founder and macroeconomic commentator, identified in an essay 3 mechanisms that readers should keep in mind as a “Yen-quake” to curb yen appreciation. He pointed out that the dollar-yen exchange rate has become a political issue for both the United States and Japan.
Hayes explained that the Japanese government holds approximately $1.143 trillion in U.S. Treasuries and that GPIF, the Government Pension Investment Fund, holds $23 billion, arguing that sufficient collateral theoretically exists to swap into dollars through the FIMA facility. He explained, however, that the facility has counterparty-specific caps, currently set at $60 billion.
Hayes also believes that if the FIMA cap is raised, Japan could draw more dollars from the facility than it has to date, as Japan and the United States are expected to reshape the dollar-yen exchange rate through coordinated intervention.
Hayes described this framework as a “modern version of the Plaza Accord era” formed through coordinated intervention, but refrained from predicting when a formal announcement might be made. The core of his argument is that expanded dollar liquidity tends to lift risk assets, including Bitcoin.