Arthur Hayes Says EUR/JPY Drop Could Fuel Crypto Liquidity Surge

Arthur Hayes, Chief Investment Officer at Maelstrom, has projected that the EUR/JPY currency pair could decline sharply from around 185 to below 140 by June 2027. Hayes connects this potential decline directly to global central bank liquidity dynamics, arguing that currency market shifts will signal renewed monetary expansion by the Federal Reserve and unlock significant liquidity for risk assets, including cryptocurrencies. The analysis highlights the US Treasury's use of the Exchange Stabilization Fund to sell euros and support Japan's yen intervention, creating backdoor dollar liquidity without explicitly expanding the Fed's balance sheet. Furthermore, Hayes points to political and banking vulnerabilities in France ahead of its 2027 presidential election, noting that widening French-German bond yield spreads could force European monetary authorities into unofficial stimulus. According to Hayes, strains on European lenders will reduce their participation in short-term funding markets, inevitably pulling the Federal Reserve into expanded repo purchases. As a result, he views the EUR/JPY pair as a key early-warning gauge for accelerating global liquidity flows.