Foreign exchange market: That's why Trump has to help Japan's Prime Minister Takaichi out of the yen trap
The USA is supporting Japan with the Yen. The question is: Why? It is clear that the Prime Minister can currently make good use of help with domestic and financial policy.
Tokyo - During a White House interview, President Donald Trump explained why his administration intervened in Japan's foreign exchange market on the weekend. The US and Japan share a strong relationship and the US possesses significant financial strength, Trump stated. Japan's central bank had previously sold dollar reserves and bought around 59 billion dollars worth of yen to support its currency.
Two days prior, the US Federal Reserve also entered the market for the first time since the 2011 earthquake disaster and purchased an unknown quantity of yen. This coordinated action succeeded in boosting the Japanese yen, causing the dollar to drop in value by almost 155.31 yen within two trading days. The spark was Japans Prime Minister Sanae Takaichi's economic policy: by pledging to continue heavy government spending despite a debt-to-GDP ratio of over 200 percent, she had trapped Japan in a situation that threatened to put pressure on the US bond market as well.
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