All the Hoopla over the Yen for Nothing

Last night the Japanese Yen was skyrocketing towards 160 and crossed that next round, magic level with little resistance. Then early this morning the Wall Street Journal and others spread the news of “intervention” and it dropped back to 155 on the US Dollar magically.

As of 7:50 p.m. ET, we’re right back where we started the day, more or less.

Thus after the rumors of intervention, the battle of the Bank of Japan continues unabated and the risks of a breakdown of the currency from the world’s third largest economy is still at hand.

Before anyone wonders why any Bank of Japan “intervention” is useless, I present to my readers this excellent commentary from Robin Brooks via his X account:

A follow up comment appeared and the Brookings Senior Fellow answered it perfectly:

And that is the problem the ECB, Bank of England, and Bank of Canada will soon all face.

Without a coordinated effort between all of the central banks and acceptance of higher rates on a global scale, the one thing many economies are not structured to handle now, it will provide only short term relief to that nation’s currency.

That is sadly something the Federal Reserve will soon enough be learning all about.

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