The Japanese yen unexpectedly bounced back against the US dollar, climbing from its low of 160 to 156, a level not seen since October 1986. This sudden shift followed the Bank of Japan's decision to keep interest rates steady, contrary to market expectations, causing the US dollar to weaken.

Speculation arose that the Japanese government intervened in the currency market, with reports of Japanese banks selling US dollars aggressively. Despite inquiries, Japan's top currency diplomat refrained from commenting on these market perceptions.

The sharp swing in one of the world's major currencies within minutes caught the attention of global capital markets experts, signaling a potentially significant event that could impact the global market landscape.

The decline in the US dollar led to a positive response in stock markets, with the US dollar index dropping to 105.46 and US Treasury yields also experiencing a decline. Futures for US stock markets, including Dow Jones, S&P 500, and Nasdaq, all showed signs of recovery. Similarly, Asian stock markets rose as investors shrugged off concerns over a hot PCE inflation report, focusing instead on the upcoming US Federal Reserve monetary policy decision.

In the crypto market, the drop in the US dollar was viewed favorably as it could boost sentiment for market recovery. Additionally, the US Treasury Department's announcement of a potential $1.4 trillion liquidity injection in the second quarter of 2024 was seen as beneficial for risk assets.

However, the crypto market faced pressure from news of liquidations ahead of the Fed's monetary policy decision, leading to continued liquidation of long positions and hindering signs of market recovery.

Bitcoin and Ethereum experienced significant long liquidations, accompanied by mixed signals from the derivatives market. Despite this, Bitcoin traded at $62,241, while Ethereum changed hands at $3,180, both experiencing declines in the past 24 hours.

In conclusion, the surprising strength of the Japanese yen against the US dollar triggered notable reactions in both the stock and crypto markets, reflecting the interconnectedness of global financial systems and the impact of central bank decisions on investor sentiment.