#economics#finance#debt
Challenges with the Falling Yen
Today I learned that Japan has spent about $160 billion trying to stop the yen from falling, but without success. Over the past five years, the yen's exchange rate against the dollar has dropped by 43%. This is a significant issue for a country with a debt-to-GDP ratio of 230%. For the first time since 2011, the US helped Japan support its currency by selling euros. This is because Japan is the largest holder of US government debt. If the yen continues to fall, Japan will have to sell US bonds to pay off its debts.