BTC/JPY Dips as Yen Emerges Top Hedge Amid US Tariff, Recession Fears

The BTC/JPY pair fell 1% Wednesday after failing to breach a key trendline resistance, as investor demand for the Japanese yen surged on rising U.S. recession and tariff risks. According to TradingView data, Bitcoin priced in yen on bitFlyer pulled back after testing resistance drawn from the January 20 record high.

Goldman Sachs now favors the anti-risk yen as the top hedge against a potential U.S. downturn, citing elevated uncertainty around President Donald Trump’s new “Liberation Day” tariffs, which could spark a global trade war. The move has rattled markets, with Asian equities and U.S. futures treading water.

Kamakshya Trivedi, head of FX and rates strategy at Goldman Sachs, said the yen is the best currency hedge if U.S. recession risks grow. He also noted that the yen performs well when U.S. equities and real yields decline simultaneously.

Although Bitcoin is often seen as digital gold, its price action remains correlated with tech stocks, making it vulnerable during Wall Street sell-offs. If risk aversion rises, the yen’s strength could force the unwinding of carry trades—investments funded by low-yielding yen—which often accelerates declines in risk assets like BTC. A similar event in August last year saw Bitcoin tumble from $65K to $50K in just one week.

BTC/USD also mirrored the yen-based losses, underlining the broader market jitters. Goldman expects the yen to strengthen further, projecting USD/JPY to fall to the low 140s by year-end. As of writing, USD/JPY trades at 149.77, with the exchange rate closely tracking the U.S.-Japan 10-year bond yield gap. The recent drop in Japanese yields adds further support for the yen’s bullish outlook.