JPY, NZ and BTC: We remain mostly in between narratives

USD/JPY

USDJPY has come off a bit, and I sold ½ the position at 159.23. The vibe overall out there puts me in the minority as most banks and strategists think it’s too early for intervention given the speed condition is not yet met. I can see the logic there, but if I look back over the many interventions over the years, the MOF rhetoric is a better indicator than any specific speed measure like the Kanda 10-yen measure. These speed measures are useful at the margin, but in the end, USDJPY intervention is a somewhat subjective and arbitrary decision by human beings and the current human beings in Tokyo are not the same human beings running the show in 2022, 2024, or in earlier intervention periods where they bought USDJPY pre-Abenomics.

It's particularly interesting that Katayama referred specifically to the January 9 USDJPY rally on the dissolution of the Lower House headlines as “not reflecting fundamentals”. There is quite a bit of irony there as she is directly contravening the market view with that comment and saying that government policy should not affect the value of the yen. But it does! Regardless, this administration is keen to attempt the triple sow cow of loose fiscal, negative real rates, and stable or stronger yen.

The policy contradictions are evident and that’s why everyone is bearish JPY right now, but that doesn’t preclude a zippy reversal to 155 if they intervene. That said, the USDJPY buyers will be lined up 154/155 on any MOF appearance.

Bird

The New Zealand economy is rebounding, though you would not know it from the price action in the Kiwi. The Quarterly Survey of Business Opinion, an important piece of the NZ economic puzzle, came in strong Monday afternoon and overnight we got two minor data points also showing some strength. It appears as though the many interest rate cuts are operating with a lag now and the NZ economy is bouncing out of the trough.

The QSBO flipped from 4% net negative on the economy to 9% net positive, though the overall vibe is nowhere near explosive or mega-optimistic. Cautiously optimistic is probably the right way to describe it. With Anna Breman set for her first meeting in mid-February, the odds of a dovish outcome there have slipped towards zero. I suppose the market isn’t responding much because we are still far, far away from thinking about thinking about a rate hike cycle in NZ. Something for your radar, though, as the short NZD trade looks well past its expiry date. Short GBPNZD might be something to consider if you’re a bigger picture macro person.

Bitcoin

In a world where there is a shortage of good places to park your money if you’re worried about counterparty risk, it makes sense that gold and silver would be rallying. Then again, it would have made sense that bitcoin would be rallying too, and it went straight down for the second half of 2025. It’s starting to wake up from its slumber, a bit, and I just wanted to point out that the 100-day moving averages are coming up, along with the important old supports that broke and have now become resistance. Note the horizontal red line showing an important series of supports that I had focused on back in the summer of 2025 and again in November 2025. The level broke somewhat cleanly and we have not been back above since. Broken megasupports like that tend to become important resistance on the way back up so bears can get busy as we near the 98400/99400 zone, or bulls can add on a break of 100k.

I would think a move through 100,000 would trigger a strong psychological response from the market given the laggy nature of bitcoin vs. gold, silver, and stocks.

Final thoughts

My inbox is all about imminent economic strength in the USA, with Apollo’s latest note outlining 10 tailwinds that could cause the US economy to overheat in 2026. That is a particularly bullish view, but it’s not out of consensus. I find it interesting that despite the near-universal bullish / running it hot economic consensus, 10-year yields are still languishing around 4.16%. Perhaps a tell. With tariff passthrough peaking, maybe we are in a disinflationary boom. Or something wicked this way comes.