Bitcoin (BTC) fell 3.5% Monday, with at least half of the losses occurring during the European trading hours.

Market pundits jumped the gun, attributing the entire slide mainly to early morning losses in Japan’s Nikkei index, which tanked after Shigeru Ishiba, seen as a monetary policy hawk, won the leadership race to become Japan’s prime minister.

It’s common for BTC to take cues from major regional equity market indices. However, on Monday, the Japanese yen, barring a minor early morning bid, weakened across the board, challenging the narrative that hawkish Ishiba weighed over risk assets, including BTC. Hawkish/dovish developments typically have a greater bearing on national currency.

The USD/JPY pair rose 1% on Monday, and the AUD/JPY cross, seen as a risk barometer by analysts, rose 1.15%, offering positive cues to bitcoin and other riskier assets. Both pairs are up at press time, hinting at continued yen depreciation and risk-on environment. Besides, on Sunday, Ishiba said monetary policy must remain accommodative as a trend, suggesting the bias for lower borrowing costs as opposed to faster rate hikes.

Clearly, markets currently do not seem worried about Ishiba’s supposed pro-monetary tightening image and potential faster rate hikes by the Bank of Japan (BOJ). The central bank raised rates in late July, triggering a broad-based unwinding of the risk-on trades funded by cheap JPY-denominated loans. Back then, BTC dropped from roughly $65,000 to $50,000 in a matter of days.

It appears other dynamics were at play on Monday rather than just Ishiba and Nikkei’s influence. Perhaps, BTC was simply overbought and due for a good old bull market pullback after a near 90-degree rally from lows under $53,000.

Looking ahead, the yen and not Nikkei warrants attention, as the Japanese currency is a “U.S. recession trade,” according to Amundi Investment Solutions.

In a recent blog post, the firm said that “repatriation of Japanese foreign assets is not a material risk for now, but its potential for a large market impact always warrants attention.”