US-Japan Currency Intervention Sparks Global Financial Crisis Fears

The US and Japan have joined forces to intervene in foreign exchange markets and support the yen. The move is aimed at preventing a sharp decline in the currency, which could lead to a global financial crisis.

Traders are calling this possibility 'mutually assured destruction', as a mass sale of dollar assets would severely hit Japanese exporters and skyrocket interest rates globally.

The US Treasury has actively intervened in favor of the yen for the first time since the Asian Financial Crisis of 1998. However, the effectiveness of this intervention is uncertain, as both sides seem to be acting more for impressions than with a real intention to direct markets.

Japan's patience with the US is running out, particularly due to Trump's new tariffs on 60 trading partners, including Japan. Tokyo was caught by surprise and is working in good faith to compile a 550 billion dollar package demanded by Trump in exchange for tariff reductions.