US buys yen to stop Japan from wrecking America’s bond market
Japan is the largest foreign holder of US Treasuries, and its currency – the yen – is in trouble. The yen recently hit a 40-year low against the US dollar. The US Treasury had joined Japan’s finance authorities in an intervention last week to prop up the yen. Japanese investors collectively own about $1 trillion in Treasuries – so preserving them means preserving the world’s biggest buyer of U.S. debt. Because if Tokyo dumps U.S. debt, the U.S.’s $40 trillion borrowing problem just got a whole lot more expensive. So, the US is basically just avoiding a sell-off in US Treasuries by…
