US Treasury Steps In to Support Struggling Japanese Yen

The US Treasury has intervened to prop up the value of Japan's yen, which recently hit a four-decade low against the dollar. The move is aimed at helping Japan cope with rising inflation caused by a historic oil shock triggered by the Iran war.

According to analysts, the intervention will allow Japan to avoid selling US Treasury bonds or treasuries, preventing upward pressure on interest rates and making US exports more affordable for Japanese buyers.

The decision comes as Japan struggles with public debt exceeding 200% of its GDP and a government stimulus package that could deepen fiscal challenges. The Bank of Japan has maintained low-interest rates, which makes the yen less appealing to investors and erodes its value.