The Japanese currency, the yen, rallied briefly from last week’s historic low of 164 to the dollar, after a Reuters journalist, during an open press-access break in a Cabinet meeting, photographed a note in front of Secretary of Treasury Scott Bessent, reminding himself to buy “$5-10 billion yen (JPY).” The Treasury, which has increasing problems of its own with $40 trillion in debt and rising rates of interest and inflation, had not bought yen since 2012, after the March 2011 earthquake and tsunami hit Japan.
Now, however, the “Japan carry trade,” famous since the 1980s, wherein the expectation for the yen against the dollar or euro was always lower, may be breaking down. The yen, which previously had a rate of 140/dollar, or so, as a low, now was 10-15% lower than that.
