Japanese Data Could Hit Bitcoin After French Bond Shock
Tokyo trading data could show whether Japanese investors are broadly cutting back on foreign bonds, with the yen carry trade as a possible link to Bitcoin and Ethereum.
Key Takeaways
- A Japanese fund sold all of its French government bonds and moved the money into German bonds and short-term Japanese debt.
- Japan will publish new trade data on Thursday that should show whether Japanese investors are selling foreign bonds more broadly.
- The numbers matter for Bitcoin and Ethereum because shocks around the yen have already triggered selling pressure in crypto before.
A Japanese fund has sold all of its French government bonds, while the French bond market is under pressure. On Thursday, Japan will release new data that should show whether this was an isolated move or part of broader selling by Japanese investors. For Bitcoin and Ethereum, that matters because earlier shocks around the yen also quickly spilled over into crypto. The combination of higher Japanese rates and a weaker yen is also keeping broader macro concerns alive, as was already visible in the recent rise in Japanese bond yields.
French Debt and Japanese Selling
Shinji Kunibe, who leads the global bond team at Sumitomo Mitsui DS Asset Management, sold all French government bonds in his fund. The money went into German bonds and short-term Japanese debt. The size of the position was not disclosed.
The timing is sensitive. France has debt equal to about 119% of its annual economic output and paid a 10-year yield of 4.96% last week, the highest level since 2002. At the same time, the country sold about €12 billion in long-term bonds on October 1, with bids coming in at roughly twice that amount. That shows there is still demand, but also that investors are taking a harder look at French public finances.
What Japan Will Show on Thursday
The Japanese Ministry of Finance will publish the weekly trade data on October 8 at 8:50 a.m. Tokyo time. It includes the country's biggest banks, insurers, and funds. The latest report, which ended on September 26, already showed net selling of foreign bonds: ¥684.5 billion in one week and ¥1.9 trillion in the week before that.
The data do not name France separately. Everything is grouped under foreign bonds as one category. That means the new release can show whether Japanese players are cutting risk more broadly, but not directly how much of that came specifically from French bonds.
Why Crypto Is Listening
The link to crypto runs through the yen carry trade. For years, investors borrowed cheaply in yen to buy higher-yielding assets elsewhere. If the yen rises quickly, those loans get more expensive and can trigger selling in other markets.
That same mechanism played out in August 2024, when an unexpected rate hike from the Bank of Japan pushed the yen sharply higher and sent Bitcoin down from around $62,000 (€55,200) to $49,000 (€43,700) in about a week. The central bank later also stepped in with a reported $35 billion yen intervention, which further supported the currency and raised fears of a broader unwind of carry trades. Bitcoin was trading around $85,363 (€76,000) on Sunday, while the market waits for Thursday's Japanese data.
