Yen Intervention Masks New Era of Monetary Policy as Industrial Tool

A recent joint yen intervention by the US and Japan has sparked controversy over its true intentions. The move, which saw an estimated $58.97 billion sold to buy back the Japanese currency, was initially framed as a favour between friends by Washington.

However, experts argue that this framing is misleading, and that the intervention was actually a strategic move to allow Tokyo to continue funding its massive commitment to American AI infrastructure.

The $550 billion pledge to support US AI development is a significant one, and the yen intervention has ensured that Japan can continue to fund this endeavour without worrying about currency fluctuations. This marks a new era in which monetary policy is being used as a tool of industrial policy.