JAPAN JUST LOST ANOTHER ROUND AGAINST THE YEN.
The Japanese yen has fallen back past ¥158 per dollar despite an estimated $100 BILLION U.S.)Japan intervention.
That should terrify policymakers.
Authorities can spend billions defending a currency.
But if the underlying forces pushing the yen lower remain intact, intervention only buys time.
The market is sending a brutal message:
You cannot permanently fight monetary divergence with foreign-exchange firepower.
If U.S. rates remain relatively attractive while Japan struggles to normalize policy, capital has a powerful incentive to keep flowing toward the dollar.
And that creates a dangerous feedback loop.
Weaker yen means higher import costs.
Higher import costs mean more inflation pressure.
More inflation pressure makes Japan’s policy decisions even harder.
The bigger risk?
If markets begin believing intervention cannot stop ¥160, the psychological barrier could break fast.
This is no longer just a currency story.
It is a test of how much control central banks still have over global markets.
The yen isn’t just falling.
It’s challenging the credibility of Japan’s entire defense strategy.
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