New week.

What’s going on?
Why is everything dumping again?

Two main reasons 👇

1️⃣ The U.S. could face a government shutdown in 6 days

2️⃣ The Fed may be involved in a Japan intervention

1️⃣ U.S. shutdown risk 🇺🇸

Shutdown probabilities are now around 78%.

Democrats have announced they’ll vote against the new funding package.

If no deal is reached by January 30, parts of the U.S. government shut down.

Whenever shutdown risk appears:

• Uncertainty spikes
• Risk appetite drops
• Markets sell first, ask questions later

2️⃣ Japan & the yen 🇯🇵

Japan has kept its currency very weak for years.

Many funds borrow cheap yen and use that money to invest in stocks and crypto
(the classic yen carry trade).

When the yen starts to strengthen, those funds are forced to unwind positions
to repay their loans.

That means:

• Selling stocks
• Selling crypto

➡️ Result: fast, aggressive sell-offs

⚠️ Signs of possible intervention are increasing

• Japan’s Prime Minister warned about action against “abnormal” yen moves
• Traders report the NY Fed contacted banks about the yen — a typical step before intervention

What would an intervention mean?

• The U.S. sells dollars
• Buys yen
• Yen strengthens
• Dollar weakens

But before that happens, markets usually react like this 👇

Yen up → carry trades unwind → assets get sold → markets drop