Singapore: US treasury's decision to purchase about $10 bn of Japanese yen appears to be an act of munificence to resuscitate a dependent ally's rapidly depreciating currency. It seems in line with other recent dollar-defence interventions, including the $20 bn currency swap line extended to Argentina in October 2025, and the one formalised with the UAE earlier this year.
Certainly, the yen is tottering. A stagnant economy coupled with increased social welfare spending has ruined the exchange rate, presaging high inflation and threatening sovereign debt markets and global supply chains. But this was also a Hobson's choice.
