Yen rises on Fed rate outlook as Bitcoin faces liquidity challenges

The Japanese yen strengthened modestly against the U.S. dollar as traders reassessed Federal Reserve interest rate expectations following weak U.S. economic data. Despite Japan's second-quarter GDP expanding at an annualized rate of 1.1%, the yen gained 0.2% to approximately 159.055 per dollar. Market participants are looking toward the Jackson Hole symposium for signals on U.S. monetary policy, as recent inflation and payroll data have lowered the likelihood of further Fed rate hikes.

In the cryptocurrency market, Bitcoin shows potential upside as it defends a median realized price support level of $63,200. However, experts note that the rally currently lacks sufficient liquidity to sustain a structural breakout. Recent trends show capital flight, including $385.2 million in weekly net outflows from U.S. spot Bitcoin ETFs and a 4.5% decline in stablecoin supply from May highs. For a bullish continuation, Bitcoin must maintain a cost basis of $67,176 alongside increased spot volume and net ETF inflows.