The Bank of Japan repeatedly raises interest rates, yet the yen remains unable to rebound. Since the beginning of the year, the USD/JPY has gained less than 1%, currently trading around 155.70, approaching the annual low. The April rebound has long since faded, and the risk of tariffs under Trump has become the final straw crushing the camel.

The latest warnings from JPMorgan Chase and BNP Paribas point to the same conclusion: structural issues cannot be solved by simply raising interest rates. The widening US-Japan interest rate differential, negative Japanese real interest rates, and continuous capital outflows—under these three pressures, institutions generally believe the yen could fall to 160 by the end of 2026, with some even not ruling out reaching 165.

Market reactions are straightforward. Arbitrage trading is resurging, and leveraged funds' bearish sentiment on the yen has reached a seven-month high. Retail investors are beginning to buy up overseas assets, corporate mergers and acquisitions are ongoing, and a visible capital outflow channel is forming.

Officials are frequently making statements, hinting that intervention may be on the way. But frankly, relying solely on verbal warnings is unlikely to change this situation. When fundamentals and market sentiment point in the same direction, words tend to be particularly powerless.

Where will the real turning point come from? It may have to wait for the next round of policy or economic data shocks. Until then, capital flows will continue to serve as the invisible hand that influences liquidity in the crypto market.