economy
The Guardian view on Japan’s yen: Trump wants to keep the easy-money machine running
A cheap currency helps finance the US tech boom. Washington is intervening because allies matter only when they are useful
TL;DR
- The Japanese yen is near 160 to the dollar, despite recent US-Japanese intervention.
- Japan's ultra-cheap money acts as a global funding utility, benefiting US markets through the 'carry trade'.
- US Treasury intervention aims to preserve this funding pipeline, which supports investment in US tech shares and AI.
- A collapsing yen or aggressive Japanese rate hikes could trigger market instability and a US asset sell-off.
- The US Treasury is exploring options like lending dollars against Japanese treasuries to stabilize the yen without forcing Japan to abandon its economic programs or sell its US debt holdings.