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US launches coordinated intervention to prop up Japan’s yen
The yen is nearing 40-year lows, and a weaker currency is raising the cost of Japan’s energy and food imports.
The United States has moved to support the Japanese yen, in what is described as a coordinated intervention with Japan’s government aimed at halting the currency’s fall, which is approaching 40-year lows, according to the Guardian Business.
The article notes that Japan has struggled to stop the accelerating decline in the yen, a problem that can make imported energy and food more expensive for businesses and consumers, while also complicating efforts to rein in inflation and restart sustained growth. It adds that Japan has already spent billions of dollars since 2022 trying to limit the yen’s decline.
The Guardian Business attributes part of the pressure on the currency to continued selling by investors, alongside broader global factors. It also points to Japan’s reliance on energy supply linked to the Middle East and the knock-on effects of a regional slowdown tied to the US war on Iran.
The report further cites Japan’s policy and fiscal backdrop, including the Bank of Japan keeping interest rates extraordinarily low, which can reduce the yen’s appeal to international investors. It also highlights that Japan’s total public debt is above 200% of GDP, the highest level in the G20, as additional context for the currency dynamics.