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Arthur Hayes, a former CEO of BitMEX, claims that a potential intervention to support the Japanese yen may benefit Bitcoin.

His remarks come after reports that the New York Fed checked the dollar-yen exchange rate in January. However, there is no indication of liquidity expansion in the Federal Reserve’s current balance sheet data. Hayes stated in a post on X that the Fed would probably need to buy yen and sell dollars in order to provide support for the yen, which would increase financial system liquidity.

According to him, the Fed would be expanding its balance sheet if the line item for “foreign currency-denominated assets” increased. Bitcoin has historically performed better during times of balance sheet expansion. Following reports that the New York Fed checked dollar-yen rates yesterday, January 23, speculation increased.’

This month, Japanese officials have also repeatedly cautioned against making excessive currency movements. After a period of persistent weakness, the yen strengthened in response to these developments, momentarily trading close to 155.90 per dollar. Despite the signals, there has been no formal announcement of US or coordinated intervention.

. Foreign currency-denominated assets are stable at about $19 billion, with no discernible rise, according to 4.1 releases.

The Fed’s overall balance sheet is still shrinking and stands at about $6.58 trillion. According to Brain AI, the balance sheet estimate is declining by about $75 billion every month. The most recent data also showed a significant decline in bank reserves, suggesting a net drain rather than an increase in liquidity. The most recent report showed a slight increase in Treasury holdings, but the balance sheet did not grow overall