Japan Accepting Trump Trade Deal A Sign Of Desperation? Market Commentator Says Bitcoin And Gold Have Known This For A 'Long Time'

Japan's agreement to the terms of the U.S. trade deal signals a deeper economic crisis, with Bitcoin (CRYPTO: BTC) emerging as a potential beneficiary of the chaos, The Kobeissi Letter said on Wednesday.

What happened: In an X post, the capital markets commentator implied that Japan accepted an unfavorable deal involving a $550 billion investment in the U.S., with the latter receiving 90% of the profits.

"In order to agree to this ‘deal,' Japan’s economy must be far worse than most people expect," The Kobeissi Letter stated. "Japan is desperate."

Japan’s 10-year bond yields surged to 1.59% on Wednesday, a level not seen since 2008. Demand for the 40-year Japanese government bond offering was the weakest since 2011, triggering a selloff across the country’s yield curve.

Typically, rising bond yields suggest expectations of higher inflation and reduced confidence in the government’s ability to manage debt.

"Bitcoin and Gold have known this for a long time," The Kobeissi Letter said, implying that the apex cryptocurrency would act as a hedge against fiat debasement and economic instability.

See Also: Why Crypto Investors Are Receiving Internal Revenue Service Warning Letters

Why It Matters: Carry trades—strategies where investors borrow in low-interest currencies like the yen to invest in higher-yielding assets elsewhere—start to unravel when yields in Japan rise unexpectedly.

The phenomenon occurred in the summer of 2024, disrupting capital markets across the globe. Interestingly, Bitcoin was not immune to the chaos, and fell alongside stocks at that time.

It’s also worth noting that while the bond market sold off, the trade deal news propelled Japan’s Nikkei 225 Index up 3%, with auto stocks like Mazda Motor Corp and Mitsubishi Motors Corp leading the charge.

These developments come in the wake of speculation that Japan’s Prime Minister Shigeru Ishiba could resign after his party lost its majority in Japan’s upper house over the weekend. The Japanese leader has denied the resignation rumors.

Price Action:  At the time of writing, BTC was exchanging hands at $118,550, down 0.22% in the last 24 hours, according to data from Benzinga Pro. Year-to-date, it has grown 27%, and 13% over the last month.

Photo Courtesy: FOTOGRIN on Shutterstock.com

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