Yen Rescue May Only Be Temporary Fix for Japan's Economic Woes

The Bank of Japan and the US Treasury intervened in currency markets to prop up the yen last week, spending an estimated $US87 billion and $US10 billion respectively.

This marked the first time since the 1998 Asian financial crisis that the US and Japan have acted together to boost the yen's value.

The interventions drove the exchange rate up to a peak of 155.21 yen to the dollar, but it has since slipped back to just over 157.7, after hitting 158.40 on Friday.

Despite this, economists warn that Japan's economic fundamentals are still weak and could lead to further currency instability in the future.