Japanese Companies Add Bitcoin, XRP to Reserves as Yen Slumps

Japanese companies are increasingly adding Bitcoin and XRP to their reserve assets instead of holding cash as the yen trades near its weakest level in more than four decades, according to an analysis.

CoinDesk reported on July 8 that SBI VC Trade, the cryptocurrency exchange under SBI Holdings, is seeing rising corporate demand for Bitcoin and XRP.

SBI VC Trade recently surpassed 2 million registered accounts, nearly double the level a year earlier. The company said the increase reflects growing demand from businesses looking to cut cash holdings and diversify reserve assets into alternatives such as cryptocurrencies as the yen's weakness persists.

Use of corporate crypto services has also risen, particularly as some Japanese companies offer Bitcoin or XRP through shareholder benefit programs.

Market participants also linked the trend to an expansion in yen-funded carry trades. As investors borrow low-interest yen to invest in higher-yielding assets, some of that money is flowing into cryptocurrencies through regulated exchanges in Japan rather than offshore platforms.

Separately, data from the U.S. Commodity Futures Trading Commission showed hedge funds' net short yen positions stood at about 138,000 contracts as of June 30, the highest level since 2007. Markets are focused on whether the yen will remain weak as elevated U.S. interest rates and the Bank of Japan's relatively accommodative monetary policy continue.