Arthur Hayes: EUR/JPY Exchange Rate Could Signal Expansion of USD Liquidity

BitMEX co-founder Arthur Hayes stated that the EUR/JPY exchange rate is a key macroeconomic indicator to watch. He predicts that the pair could drop from approximately 185 to 140 or lower by June of next year, suggesting that this trend would precede a significant increase in USD liquidity. Hayes argues that U.S. policy is currently driving a stronger yen and putting pressure on the euro, which may force the Federal Reserve to inject liquidity to stabilize the Treasury repo market. He noted that if the French banking system faces stress and reduces repo fin