Trump buys Japan time but he hasn’t
The Bank of Japan and the US Treasury recently intervened in currency markets to stabilize the yen, but the effects are already beginning to wane. Analysts suggest that Japan's underlying economic issues, such as high debt and low interest rates, may necessitate further interventions to prevent the currency from sliding again.
Why it matters
Currency volatility in major economies like Japan can have significant ripple effects on global trade, investment, and international financial stability.
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Share A A A The impact of last week’s dramatic interventions in currency markets by the Bank of Japan and the US Treasury to boost Japan’s yen seems to be fading. They might have to intervene again, and again.
The US and Japan acted to prop up the yen – for the first time since the 1998 Asian financial crisis – after it crashed through the 162 yen-to-the-dollar level regarded as the BoJ’s “line in the sand” last month, and kept heading northward. Before the intervention, the yen/dollar cross-rate was almost 164 yen to the dollar.
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