Hayes argued that the combination of a weakening yen and rising Japanese government bond yields signals structural stress that extends beyond local markets. In his view, this imbalance has the potential to spill over into the global financial system.
He noted that such conditions could prompt intervention by the US Treasury and the Federal Reserve, with the operational process potentially carried out by the New York Fed. Any intervention, Hayes said, would effectively amount to an indirect liquidity injection into markets.
If this process is accompanied by an expansion of the Fed’s balance sheet, Hayes believes it could create a more favorable environment for risk assets, including Bitcoin. In his essay titled “Woomph,” he added that renewed focus on liquidity could act as a strong catalyst for crypto markets.
