Good Morning, Asia. Here are the latest updates from the markets:
Welcome to the Asia Morning Briefing, your daily roundup of key stories during U.S. hours, along with market movements and analysis. For a comprehensive view of U.S. markets, check out CoinDesk’s Crypto Daybook Americas.
The Korean won and the Taiwan dollar remain tethered to their local markets, constrained by regulations established after the 1997 financial crisis.
In contrast, Japan’s yen is fully convertible, making it an ideal candidate for a stablecoin that infuses Japan’s low-rate liquidity into DeFi, allowing traders to pursue higher yields in dollar-linked assets.
With the introduction of JPYC’s yen-pegged stablecoin this week, Japan has launched Asia’s first truly global fiat-backed token, capable of circulating internationally due to the yen’s complete convertibility.
This development could revolutionize Japan’s low-rate liquidity, creating a fresh funding source for decentralized finance, enabling traders to borrow inexpensive digital yen and seek higher yields in dollar-linked assets.
This potential evolution gives the yen carry trade, a longstanding feature of global markets, a programmable, blockchain-enabled counterpart that ties DeFi yields directly to Bank of Japan policy.
The launch occurs while the Bank of Japan maintains rates at 0.5%, its highest since 2008, yet still significantly lower than global counterparts.
Policymakers are divided on the timing for further rate increases, with some advocating for a 0.75% hike by year-end, while others call for caution amid uncertainties from U.S. tariffs and local wage growth. This low-rate context, even in a tightening phase, positions the yen as one of the most affordable funding currencies globally.
Even in the event of a BOJ rate hike, on-chain yields still significantly surpass what is available in Japan’s money markets.
Platforms such as Maple, Lista, and Stream Finance are reporting annual returns between 6% and 14%, significantly above Japan’s sub-1% benchmark. A trader borrowing digital yen at an interest rate of even 0.75% would still find a substantial spread when converting to dollar-denominated assets or depositing into DeFi pools like USDC Syrup or BNSOL.
However, this remains purely theoretical. Currently, JPYC restricts redemptions to $6,500 per day (¥1 million) – not precisely sufficient to influence market dynamics.
This illustrates that even digital currencies cannot entirely escape Japan’s cautious financial framework.
The prevailing sense of prudence in Tokyo is embedded in the system, and while the on-chain carry trade may be a recent innovation, Japan’s meticulous approach to regulation is not.
Market Movements:
BTC: Bitcoin is currently trading at $110,432, reflecting a 1.6% decline in the last 24 hours, as interest from U.S. investors continues to wane post-September’s surge. CryptoQuant data indicates average spot ETF outflows of 281 BTC weekly, along with a decreasing Coinbase premium, signaling profit-taking and diminishing domestic demand following the $126K rally.
ETH: Ether is trading around $3,914, down 1.5%, mirroring Bitcoin’s slowdown. ETF inflows have nearly ground to a halt since mid-August, with CME’s six-month basis dropping to 3%, indicating a reduction in leveraged exposure and cautious positioning ahead of key U.S. macroeconomic data releases.
Gold: Gold remains stable at approximately $4,020 per ounce after recent volatility, as traders balance safe-haven demand against reduced inflation expectations and a stronger dollar.
Nikkei 225: Asia-Pacific markets exhibited mixed performance Thursday following the Fed’s 25-basis-point rate cut, with Chair Jerome Powell cautioning that a December move is not guaranteed. Investors are also monitoring developments from the Trump-Xi meeting and the terms of Seoul’s new U.S. trade agreement.
