Fed May Intervene as Trump Admin Seeks Help for Weakened Japanese Yen
Japan's Economy Minister Minoru Kiuchi downplayed inflationary risks on Tuesday, saying that consumer prices have only seen moderate rises so far. He attributed this to the limited pass-through of higher costs from the Middle East conflict.
This assessment contrasts with the Bank of Japan's warning last week about rising inflation. The Fed may soon be involved in efforts to support the Japanese currency, which is under pressure due to the country's trade deficits and other economic challenges.
Treasury Secretary Scott Bessent has reportedly asked the Federal Reserve to expand a lending facility that would enable Japan to support its currency without affecting the US Treasurys market. This request comes as new Fed Chairman faces growing pressure from the Trump administration to take action on the yen's value.