Five Charts That Show Why the U.S. and Japan Teamed Up to Buy Yen
- Markets Startups
Peter Lynch- 0
- 2 minutes read
Washington and Tokyo’s joint move to boost the Japanese yen marks a historic intervention in currency markets. Here is a rundown of why it happened.
Forty-year low
Japan’s currency was testing 40-year lows before Friday’s joint move, reflecting investor concern over the slow pace of interest-rate increases by the Bank of Japan and the prospect of more borrowing and spending by Prime Minister Sanae Takaichi. Yen weakness is great for tourists and Japanese exporters, but painful for households facing quickening inflation on imported goods. The Japanese government intervened to put a floor under the currency at around 160 yen to the dollar in April and May, but the currency’s slide soon resumed.
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