Will Japan’s Yen Crisis Hit the U.S. Dollar?

Japan has remained relatively quiet during years of debate over BRICS, de-dollarization and the global financial order. That may be changing.In this episode of The Secret War on Cash, Dean Heskin and Chris Agelastos examine the United States’ intervention to support the Japanese yen and the risks that intervention is attempting to contain.Japan’s currency weakness and domestic financial pressure could eventually force it to sell U.S. Treasury securities. For Washington, that would be especially dangerous because China is already reducing its exposure to dollar-denominated assets.Dean argues that America’s decision to help Japan is therefore not purely an act of support. It is also a defensive move designed to reduce the chances of another major Treasury holder becoming a large seller.Chris explains that the United States is reportedly selling euros rather than dollars to purchase yen. This may prevent additional dollar selling, but it could weaken the euro and encourage European countries to respond in ways that create another round of currency pressure.The conversation also explores the difficult tradeoffs facing Japan. A stronger yen may stabilize the currency, but it can also make Japanese exports more expensive and place additional pressure on the country’s stock market and trade position.The broader lesson is that no currency exists in isolation. The yen, euro, dollar, Treasury market and global trade system are intertwined.America’s enormous debt burden makes those relationships even more dangerous. When the world’s largest debtor depends on foreign nations continuing to hold its bonds, any major shift can become a threat to the entire system.Brought to you by Swiss America.Get your complimentary Secret War on Cash Report:Call or text: 1-800-289-2646Visit: https://www.swissamerica.com/social