Yen hits three-month high after Trump helps prop up currency
Summary
The Japanese yen reached its highest value in three months against the US dollar after the United States and Japan worked together to support the yen by buying it in the market. This joint effort came after the yen fell to its lowest level in 40 years and follows concerns about Japan’s economic policies and interest rates.Key Facts
- The yen rose to 155 yen per US dollar, its strongest since early May.
- The US and Japan carried out a rare joint currency intervention to buy yen.
- The yen had fallen to nearly 164 yen per dollar, the weakest level in 40 years.
- President Donald Trump said the US helped Japan because the yen was weakening.
- The yen weakened partly due to Japan’s lower borrowing costs compared to other countries.
- Investors used the yen to borrow money cheaply and buy higher-return US assets, a strategy called “carry trade.”
- Japan’s prime minister, Sanae Takaichi, has pushed for government spending and criticized higher interest rates.
- US Treasury Secretary Scott Bessent said they may act again and supports higher Japanese interest rates.
- Experts say this intervention probably won’t fully stop the yen from weakening.
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