Yen Breaks Key Level as XRP Leads Crypto Gains Amid Macro Uncertainty

The Japanese yen crossed the significant 150 threshold against the U.S. dollar early Friday, a development historically linked to shifts in global risk sentiment and carry trade unwinding. Meanwhile, XRP surged by more than 5%, outpacing other major cryptocurrencies during a Thanksgiving holiday session that saw Bitcoin (BTC) recover modestly from recent lows.

Crypto Market Movements

Bitcoin climbed to $96,000 early Friday, rebounding from a low of $93,500 on Thursday. Ether (ETH), Solana’s SOL, and Binance’s BNB remained mostly flat, while Cardano’s ADA added 3.5%, and Dogecoin (DOGE) dropped by 1.2%.

The CoinDesk 20 Index (CD20), which tracks a basket of major cryptocurrencies, rose by 1.3%. Mid-cap tokens such as Algorand (ALGO) and Worldcoin (WLD) saw outsized gains of up to 21%, even as catalysts for the moves remained unclear.

Yen Strength Signals Shift in Risk Sentiment

The yen’s temporary breach of 150 against the dollar was driven by speculation of a Bank of Japan (BOJ) rate hike in December, fueled by higher-than-expected inflation in Tokyo. Month-end portfolio adjustments and thin liquidity due to the U.S. Thanksgiving holiday likely amplified the yen’s move.

The market now sees a 63% likelihood of a BOJ rate hike, compared to a 67% chance of a Federal Reserve rate cut. Such a divergence could make yen-denominated loans more expensive, pressuring carry trades—strategies where low-cost yen loans are used to fund investments in higher-yielding assets.

Macro Factors Shape Bitcoin’s Path

The yen’s movements often serve as a bellwether for global risk sentiment, with its strength signaling reduced appetite for risky assets like Bitcoin. Earlier this week, a CoinDesk analysis highlighted weakening momentum in Bitcoin’s bull run, tied to the decline in the Australian dollar/yen (AUD/JPY) exchange rate.

The AUD, closely tied to global economic performance, often moves inversely to the yen, and shifts in this pairing can impact cryptocurrencies. A similar scenario played out earlier this year when yen strength on BOJ rate hike speculation triggered an 8% drop in AUD/JPY and a $20,000 decline in Bitcoin’s price.

XRP’s Outperformance

Amid this backdrop, XRP’s 5% rally stands out as a bright spot in an otherwise mixed market. Its strong performance, alongside Bitcoin’s stability above $96,000, suggests a resilient crypto sector navigating macroeconomic headwinds.

Outlook

As the yen strengthens and market participants assess potential shifts in monetary policy, cryptocurrencies remain at the crossroads of macroeconomic forces. While XRP leads gains and Bitcoin holds steady, the interplay between forex dynamics and global risk sentiment will continue to shape the path forward for digital assets.