Japanese yen warning hits risky assets, cryptocurrency market plunges

Key Points

Bitcoin fell 3.5% in 24 hours, with most major cryptocurrencies falling.

Reuters's report on possible U.S. intervention in the yen market triggered a sudden reversal in the U.S. stock market.

Although Apple reported record quarterly revenue, its share price fell about 9.3% in regular trading as chip and memory restrictions affected its prospects.

U.S. stocks recovered most of their initial losses, while Bitcoin remained below its previous support area.

The news revived concerns about the yen carry trade and led to a sudden reversal in the U.S. stock market. During the same trading session, despite Apple reporting record fiscal third-quarter revenue, it still fell about 9% in regular trading, further increasing market pressure.

Our previous analysis has pointed out how Japanese policies affect Bitcoin through global financing markets. This time, concerns stem from possible currency intervention rather than from the Bank of Japan's interest-rate policy.

Stocks rebound after yen news

A widely circulated Bull Theory post showed that the S & P 500 went from a 0.7% intraday gain to a 1.2% decline in about 40 minutes after Reuters reported.

After Reuters reported that the United States might intervene in the yen market, the U.S. stock market evaporated nearly US$1 trillion in 40 minutes. The S & P 500 index rose 0.70% on the day, increasing its market value by US$540 billion. Then, it plunged 1.20% in just 40 minutes, evaporating US$920 billion... --Bull Theory, July 31, 2026

The selling pressure then eased. At around 11:14 am ET, Yahoo Financial data showed that the S & P 500 index rebounded to 7448 points, an increase of 0.14%, after hitting an intraday low of 7399.

This rebound made it difficult for the initial decline to be regarded as evidence of continued liquidation of the U.S. stock market. The report triggered a sharp reduction in risk, but the sell-off did not continue at the same pace.

5-day market chart for the S & P 500 index.

Cryptocurrency did not follow the stock market rally

According to CoinMarketCap data, Bitcoin traded at US$62,400, down 3.5% in 24 hours.

Other cryptocurrencies: Zcash fell 4.30% to US$454.79; Ethereum fell 3.3% to US$1,853.13;XRP fell 2.8% to US$1.06;Solana fell 2.4% to US$72.82; Dogecoin fell 1.9% to US$0.06914. Hyperliquid still rose 0.3%, while BNB and TRON's declines were limited to 1%.

The rebound in the U.S. stock market has not been transmitted to cryptocurrencies. Gains in companies such as Amazon can offset Apple's decline in the S & P 500, while Bitcoin has no similar hedging power. In addition, cryptocurrency derivatives continued to trade throughout the reaction period, keeping pressure in place after the spot stock market sell-off began to ease.

Bitcoin also fell below the support area that previously limited its pullback. The region consists of a 50-day simple moving average (approximately $63,400) and a 0.236 Fibonacci retracement level (approximately $63,600).

The transaction price is close to $62,410, putting Bitcoin below these two levels. Recovering the area will reduce the importance of this breakthrough, while continuing trading below it will weaken the structure in the near term.

Why possible yen intervention is so important

Reuters reported that the U.S. Treasury Department, through the Federal Reserve Bank of New York, has notified several banks that they should be prepared to respond to possible intervention in the yen market.

The report involved preparations for potential actions and did not confirm that the United States had entered the foreign exchange market.

Investors can borrow in yen at relatively low rates and move money into assets that provide higher returns. If intervention causes the yen to appreciate, the dollar value of these liabilities increases, making it more expensive to maintain leveraged positions.

Reducing this exposure may require investors to sell liquid assets and buy yen to repay the original financing. The market's synchronized response is consistent with broader risk reductions, although available data does not identify which investors are selling or how their positions are being funded.

Apple's supply warning masks record results

Apple enters trading hours after reporting its strongest June quarterly results ever. Revenue reached $109.4 billion, a year-on-year increase of 16%, while the iPhone, Mac and services businesses all set quarterly revenue records in June.

Market concerns are focused on the next few months rather than Apple's just-concluded quarter. The company expects revenue to grow by 9% to 11% in the September quarter, below Wall Street's expectations of about 12%.

Apple also warned that limited advanced chip manufacturing capabilities and memory shortages are limiting its ability to meet demand. Rising memory costs raise another concern for future profit margins.

The company described the problem as supply constraints rather than weak customer demand. Even so, the warning suggests that Apple may not be able to turn all available demand into sales in the next quarter.

The latest data shows that Apple's share price was trading around $302 at 11:26 a.m. EST, down 9.2%. This is data from regular trading hours, not the initial after-hours reaction. The stock had fallen about 5.5% after hours before widening its decline in early trading on Friday.

Apple's (AAPL) share price chart shows a sharp decline in the market.

Therefore, a 9.3% decline should not be seen as a denial of Apple's quarterly results. Results exceeded expectations, but investors are weighing slower growth expectations, supply constraints and their potential impact on future revenue and profits.

Due to Apple's weight in major U.S. indices, its decline added pressure during the same period as the market responded to the yen report. Gains in other sectors, including a rebound after Amazon's earnings report, later helped the broader index recover.

Carry trade risk not yet confirmed

Market reaction suggests that the possibility of yen intervention is sufficient to trigger rapid de-risk. But this does not prove that a sustained carry trade unwinding has begun.

The S & P 500 stabilized after an initial decline, and Reuters reports described prepared rather than completed interventions, and there was no direct evidence that cryptocurrency sellers were unwinding positions in yen financing.

The continued appreciation of the yen, the renewed weakening of global stock markets, and the decline in open cryptocurrency contracts accompanied by a large number of long liquidations will provide stronger evidence for broader deleveraging events. Maintaining Bitcoin below the US$63,400 -63,600 support zone will add technical weight to this interpretation.

Until then, this trend was more appropriately understood as a drastic reaction to a combination of multiple risks: concerns about global financing conditions, pressure from one of the market's largest technology companies, and Bitcoin's fall below short-term support.