ANALYSIS: Strong yen 'rolls over' in global market reshuffle, hitting assets like gold and bitcoin

July 25 (Bloomberg) -- The yen's stunning recovery is upending global markets and hitting assets such as Japanese stocks, gold and bitcoin as investors reassess their leveraged bets, according to Gold Ten. On Thursday, the yen rose to its highest point against the dollar in more than two months, reflecting growing bets that the interest rate gap between Japan and the U.S. could narrow. A stronger yen could hurt Japanese exporters, sending the Nikkei 225 into a technical correction. Currencies such as the Australian dollar were hit hard as the interest rate trade fell out of favor. Gold and Bitcoin also fell on signs that traders are withdrawing previously popular bets in favor of the yen.” This is effectively a major deleveraging event caused by the yen rolling short,” said Kyle Rodda, senior market analyst at Capital.Com. “It's forcing a massive unwinding of positions across the market.” Yuting Shao, macro strategist at State Street Global Markets, said, “Other Asian markets, particularly North Asian currencies including the Korean won and offshore Chinese yuan, are being supported. With the reversal of the carry trade, the yen rally could continue into next week's Bank of Japan meeting.”