The Japanese Yen is Collapsing and Threatening America
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Japan’s collapsing currency was becoming America’s problem. If Tokyo had dumped enough U.S. Treasury bonds to rescue the Yen, the shock could have sent borrowing costs soaring across the United States. This video explores how the Yen Carry Trade created one of the strangest financial standoffs in the global economy. For years, investors borrowed cheap Japanese Yen and poured the money into higher-yielding U.S. assets. Wall Street profited, but the constant selling helped push the Yen toward its weakest levels in decades. Japan needed enormous amounts of dollars to fight back. The problem was that much of its wealth was tied up in more than a trillion dollars of U.S. government debt. Selling those Treasuries on the open market risked pushing bond yields, mortgages, corporate borrowing, car loans, and credit-card rates sharply higher. So the Federal Reserve provided another route. Instead of forcing Japan to dump U.S. debt, the two countries found a way to unlock roughly $100 billion i
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