{"id":2917,"date":"2026-07-06T23:13:14","date_gmt":"2026-07-06T23:13:14","guid":{"rendered":"https:\/\/crosscountrymovingteams.com\/?p=2917"},"modified":"2026-07-06T23:13:14","modified_gmt":"2026-07-06T23:13:14","slug":"the-yen-is-quietly-crashing-as-japans-debt-crisis-bleeds-into-currency-markets-and-efforts-to-halt-the-slide-are-doomed-to-fail-economist-says","status":"publish","type":"post","link":"https:\/\/crosscountrymovingteams.com\/?p=2917","title":{"rendered":"The yen is quietly crashing as Japan\u2019s debt crisis bleeds into currency markets, and efforts to halt the slide are \u2018doomed to fail,\u2019 economist says"},"content":{"rendered":"
\n

On Monday, the yen was down 0.58% at 162.30 per dollar. It\u2019s fallen 3.6% so far in 2026 and nearly 11% from a year ago.<\/p>\n

Read more \u2018The risks are growing and the resources are shrinking\u2019: Experts blame DOGE cuts for intensifying the Ebola outbreak, which has killed more than 500<\/a><\/p>\n

Some of the more recent triggers include fears that Japan is lagging on efforts to fight inflation after the oil shock from the Iran war. While the Bank of Japan has hiked rates, more aggressive tightening may be necessary.<\/p>\n

\n
\n
<\/div>\n<\/div>\n<\/div>\n

At the same time, other central banks are poised to get tougher, such as the Federal Reserve, making Japan\u2019s policy and currency weaker by comparison.<\/p>\n

Prime Minister Sanae Takaichi\u2019s plans for more deficit spending, which would stoke inflation further, are adding to downward pressure on the yen.<\/p>\n

But Robin Brooks, senior fellow at the Brookings Institution and former\u00a0chief economist at the Institute of International Finance, has been sounding the alarm on the yen for a while and points to Japan\u2019s massive debt, which has ballooned to 240% of GDP.<\/p>\n

In his view, the Bank of Japan is suppressing bond yields to prevent interest costs on the debt pile from becoming unmanageable. In the process, it also obscures the debt-crisis risk that would otherwise be manifested in higher yields. <\/p>\n

\n
<\/div>\n<\/div>\n

\u201cThat puts\u00a0depreciation\u00a0pressure on the yen, since investors have little incentive to stay in Japan,\u201d Brooks explained in a Substack post last week.\u00a0<\/p>\n

While a weak yen can aid Japan\u2019s exports, it risks friction with trading partners like the U.S., especially as the Trump administration seeks to shrink the trade deficit. A cheap yen also exacerbates inflation by making imports more expensive, and the country relies heavily on overseas energy. <\/p>\n

\n
\n
<\/div>\n<\/div>\n<\/div>\n

To prevent precipitous yen depreciation, Tokyo has periodically intervened in markets and spent tens of billions of dollars to shore up the currency in April and May.\u00a0<\/p>\n

\n
<\/div>\n<\/div>\n

But that has failed to halt the yen\u2019s slide, and so-called verbal intervention from Japan\u2019s chief cabinet secretary, who said last week that the government \u201cstands ready to take action whenever necessary,\u201d also fell flat.<\/p>\n

\n
<\/div>\n<\/div>\n
\n
<\/div>\n<\/div>\n

Brooks warned Japan\u2019s intervention is \u201cdoomed to fail because it treats the symptom (yen depreciation) and not the disease (too much debt).\u201d <\/p>\n

Read more \u2018Our business today is not healthy\u2019: 1,600 Xbox employees among the 4,800 laid off by Microsoft as it looks to \u2018reset\u2019 gaming division<\/a><\/p>\n

\u201cIn fact, it\u2019s my view that FX intervention is deeply counterproductive because it creates the illusion that nothing\u2019s wrong when\u2014actually\u2014there\u2019s a very serious crisis brewing,\u201d he added.<\/p>\n

For now, markets are misinterpreting the yen\u2019s quiet implosion as gradual weakening that\u2019s being managed in a controlled fashion as the constant threat of intervention holds off steeper declines, Brooks argued. <\/p>\n

The surface-level appearance of calm, however, is misleading and unsustainable as recent currency interventions have proven less and less effective, he warned.<\/p>\n

\n
\n
<\/div>\n<\/div>\n<\/div>\n
\n
<\/div>\n<\/div>\n

\u201cThere\u2019ll come a point when markets will just ignore intervention,\u201d Brooks predicted.<\/p>\n

As long as the Bank of Japan continues to prevent bond yields from expressing the country\u2019s true debt risk, the yen will face depreciation pressure and intervention will be increasingly useless, he said, adding that the yen will eventually sink to 170 per dollar.<\/p>\n

In contrast to the yen, Japan\u2019s Nikkei 225 stock index is on fire and has soared 38.5% so far this year, while the S&P 500 is up 10%.<\/p>\n

Such a rally would typically translate to more demand for the yen as investors rush into Japanese stocks. But traders have been engaged in significant currency hedging, putting downward pressure on the yen, according to the Financial Times<\/em>.<\/p>\n

\n
<\/div>\n<\/div>\n

The result is that Tokyo appears stuck, staying the course on a policy that isn\u2019t working.<\/p>\n

\u201cThe Japanese probably realize that FX intervention at the moment is an exercise in futility,\u201d Chris Turner, ING\u2019s global head of markets research, told the FT<\/em>. \u201cBut they don\u2019t want to leave yen losses unchecked in case it triggers a \u2018sell Japan\u2019 mindset should Japanese government bonds and then equities come under pressure, too.\u201d\u00a0<\/p>\n

Read more \u2018All I did was ask for a review\u2019: Trump denies demanding FIFA for a review of Folarin Balogun\u2019s World Cup red card<\/a><\/p>\n

\n
\n
<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

“There\u2019ll come a point when markets will just ignore intervention.” <\/p>\n","protected":false},"author":1,"featured_media":2916,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[399],"tags":[],"class_list":["post-2917","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-currency"],"yoast_head":"\nThe yen is quietly crashing as Japan\u2019s debt crisis bleeds into currency markets, and efforts to halt the slide are \u2018doomed to fail,\u2019 economist says - Cross Country Moving Team<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/crosscountrymovingteams.com\/?p=2917\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The yen is quietly crashing as Japan\u2019s debt crisis bleeds into currency markets, and efforts to halt the slide are \u2018doomed to fail,\u2019 economist says - Cross Country Moving Team\" \/>\n<meta property=\"og:description\" content=\""There\u2019ll come a point when markets will just ignore intervention."\" \/>\n<meta property=\"og:url\" content=\"https:\/\/crosscountrymovingteams.com\/?p=2917\" \/>\n<meta property=\"og:site_name\" content=\"Cross Country Moving Team\" \/>\n<meta property=\"article:published_time\" content=\"2026-07-06T23:13:14+00:00\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/crosscountrymovingteams.com\\\/?p=2917#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/crosscountrymovingteams.com\\\/?p=2917\"},\"author\":{\"name\":\"admin\",\"@id\":\"https:\\\/\\\/crosscountrymovingteams.com\\\/#\\\/schema\\\/person\\\/1b8121bfb9a1c55d1fff3fca675fceaa\"},\"headline\":\"The yen is quietly crashing as Japan\u2019s debt crisis bleeds into currency markets, and efforts to halt the slide are \u2018doomed to fail,\u2019 economist says\",\"datePublished\":\"2026-07-06T23:13:14+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/crosscountrymovingteams.com\\\/?p=2917\"},\"wordCount\":732,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/crosscountrymovingteams.com\\\/?p=2917#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/crosscountrymovingteams.com\\\/wp-content\\\/uploads\\\/2026\\\/07\\\/46a39fda9e2afffbe4e4a9d2295c6c59.webp\",\"articleSection\":[\"Currency\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/crosscountrymovingteams.com\\\/?p=2917#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/crosscountrymovingteams.com\\\/?p=2917\",\"url\":\"https:\\\/\\\/crosscountrymovingteams.com\\\/?p=2917\",\"name\":\"The yen is quietly crashing as Japan\u2019s debt crisis bleeds into currency markets, and efforts to halt the slide are \u2018doomed to fail,\u2019 economist says - Cross Country Moving Team\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/crosscountrymovingteams.com\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/crosscountrymovingteams.com\\\/?p=2917#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/crosscountrymovingteams.com\\\/?p=2917#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/crosscountrymovingteams.com\\\/wp-content\\\/uploads\\\/2026\\\/07\\\/46a39fda9e2afffbe4e4a9d2295c6c59.webp\",\"datePublished\":\"2026-07-06T23:13:14+00:00\",\"author\":{\"@id\":\"https:\\\/\\\/crosscountrymovingteams.com\\\/#\\\/schema\\\/person\\\/1b8121bfb9a1c55d1fff3fca675fceaa\"},\"breadcrumb\":{\"@id\":\"https:\\\/\\\/crosscountrymovingteams.com\\\/?p=2917#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/crosscountrymovingteams.com\\\/?p=2917\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/crosscountrymovingteams.com\\\/?p=2917#primaryimage\",\"url\":\"https:\\\/\\\/crosscountrymovingteams.com\\\/wp-content\\\/uploads\\\/2026\\\/07\\\/46a39fda9e2afffbe4e4a9d2295c6c59.webp\",\"contentUrl\":\"https:\\\/\\\/crosscountrymovingteams.com\\\/wp-content\\\/uploads\\\/2026\\\/07\\\/46a39fda9e2afffbe4e4a9d2295c6c59.webp\",\"width\":1200,\"height\":600},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/crosscountrymovingteams.com\\\/?p=2917#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/crosscountrymovingteams.com\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"The yen is quietly crashing as Japan\u2019s debt crisis bleeds into currency markets, and efforts to halt the slide are \u2018doomed to fail,\u2019 economist says\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/crosscountrymovingteams.com\\\/#website\",\"url\":\"https:\\\/\\\/crosscountrymovingteams.com\\\/\",\"name\":\"Cross Country Moving Team\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/crosscountrymovingteams.com\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\\\/\\\/crosscountrymovingteams.com\\\/#\\\/schema\\\/person\\\/1b8121bfb9a1c55d1fff3fca675fceaa\",\"name\":\"admin\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/50b1ad2e498f523425ee0a8cc5180a210646db1622662a3d56cc405d3e0c346a?s=96&d=mm&r=g\",\"url\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/50b1ad2e498f523425ee0a8cc5180a210646db1622662a3d56cc405d3e0c346a?s=96&d=mm&r=g\",\"contentUrl\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/50b1ad2e498f523425ee0a8cc5180a210646db1622662a3d56cc405d3e0c346a?s=96&d=mm&r=g\",\"caption\":\"admin\"},\"sameAs\":[\"http:\\\/\\\/crosscountrymovingteams.com\"],\"url\":\"https:\\\/\\\/crosscountrymovingteams.com\\\/?author=1\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"The yen is quietly crashing as Japan\u2019s debt crisis bleeds into currency markets, and efforts to halt the slide are \u2018doomed to fail,\u2019 economist says - Cross Country Moving Team","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/crosscountrymovingteams.com\/?p=2917","og_locale":"en_US","og_type":"article","og_title":"The yen is quietly crashing as Japan\u2019s debt crisis bleeds into currency markets, and efforts to halt the slide are \u2018doomed to fail,\u2019 economist says - Cross Country Moving Team","og_description":"\"There\u2019ll come a point when markets will just ignore intervention.\"","og_url":"https:\/\/crosscountrymovingteams.com\/?p=2917","og_site_name":"Cross Country Moving Team","article_published_time":"2026-07-06T23:13:14+00:00","author":"admin","twitter_card":"summary_large_image","twitter_misc":{"Written by":"admin","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/crosscountrymovingteams.com\/?p=2917#article","isPartOf":{"@id":"https:\/\/crosscountrymovingteams.com\/?p=2917"},"author":{"name":"admin","@id":"https:\/\/crosscountrymovingteams.com\/#\/schema\/person\/1b8121bfb9a1c55d1fff3fca675fceaa"},"headline":"The yen is quietly crashing as Japan\u2019s debt crisis bleeds into currency markets, and efforts to halt the slide are \u2018doomed to fail,\u2019 economist says","datePublished":"2026-07-06T23:13:14+00:00","mainEntityOfPage":{"@id":"https:\/\/crosscountrymovingteams.com\/?p=2917"},"wordCount":732,"commentCount":0,"image":{"@id":"https:\/\/crosscountrymovingteams.com\/?p=2917#primaryimage"},"thumbnailUrl":"https:\/\/crosscountrymovingteams.com\/wp-content\/uploads\/2026\/07\/46a39fda9e2afffbe4e4a9d2295c6c59.webp","articleSection":["Currency"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/crosscountrymovingteams.com\/?p=2917#respond"]}]},{"@type":"WebPage","@id":"https:\/\/crosscountrymovingteams.com\/?p=2917","url":"https:\/\/crosscountrymovingteams.com\/?p=2917","name":"The yen is quietly crashing as Japan\u2019s debt crisis bleeds into currency markets, and efforts to halt the slide are \u2018doomed to fail,\u2019 economist says - Cross Country Moving Team","isPartOf":{"@id":"https:\/\/crosscountrymovingteams.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/crosscountrymovingteams.com\/?p=2917#primaryimage"},"image":{"@id":"https:\/\/crosscountrymovingteams.com\/?p=2917#primaryimage"},"thumbnailUrl":"https:\/\/crosscountrymovingteams.com\/wp-content\/uploads\/2026\/07\/46a39fda9e2afffbe4e4a9d2295c6c59.webp","datePublished":"2026-07-06T23:13:14+00:00","author":{"@id":"https:\/\/crosscountrymovingteams.com\/#\/schema\/person\/1b8121bfb9a1c55d1fff3fca675fceaa"},"breadcrumb":{"@id":"https:\/\/crosscountrymovingteams.com\/?p=2917#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/crosscountrymovingteams.com\/?p=2917"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/crosscountrymovingteams.com\/?p=2917#primaryimage","url":"https:\/\/crosscountrymovingteams.com\/wp-content\/uploads\/2026\/07\/46a39fda9e2afffbe4e4a9d2295c6c59.webp","contentUrl":"https:\/\/crosscountrymovingteams.com\/wp-content\/uploads\/2026\/07\/46a39fda9e2afffbe4e4a9d2295c6c59.webp","width":1200,"height":600},{"@type":"BreadcrumbList","@id":"https:\/\/crosscountrymovingteams.com\/?p=2917#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/crosscountrymovingteams.com\/"},{"@type":"ListItem","position":2,"name":"The yen is quietly crashing as Japan\u2019s debt crisis bleeds into currency markets, and efforts to halt the slide are \u2018doomed to fail,\u2019 economist says"}]},{"@type":"WebSite","@id":"https:\/\/crosscountrymovingteams.com\/#website","url":"https:\/\/crosscountrymovingteams.com\/","name":"Cross Country Moving Team","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/crosscountrymovingteams.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/crosscountrymovingteams.com\/#\/schema\/person\/1b8121bfb9a1c55d1fff3fca675fceaa","name":"admin","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/50b1ad2e498f523425ee0a8cc5180a210646db1622662a3d56cc405d3e0c346a?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/50b1ad2e498f523425ee0a8cc5180a210646db1622662a3d56cc405d3e0c346a?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/50b1ad2e498f523425ee0a8cc5180a210646db1622662a3d56cc405d3e0c346a?s=96&d=mm&r=g","caption":"admin"},"sameAs":["http:\/\/crosscountrymovingteams.com"],"url":"https:\/\/crosscountrymovingteams.com\/?author=1"}]}},"_links":{"self":[{"href":"https:\/\/crosscountrymovingteams.com\/index.php?rest_route=\/wp\/v2\/posts\/2917","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/crosscountrymovingteams.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/crosscountrymovingteams.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/crosscountrymovingteams.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/crosscountrymovingteams.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2917"}],"version-history":[{"count":0,"href":"https:\/\/crosscountrymovingteams.com\/index.php?rest_route=\/wp\/v2\/posts\/2917\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/crosscountrymovingteams.com\/index.php?rest_route=\/wp\/v2\/media\/2916"}],"wp:attachment":[{"href":"https:\/\/crosscountrymovingteams.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2917"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/crosscountrymovingteams.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2917"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/crosscountrymovingteams.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2917"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}