White House adviser Hassett says stable yen can prevent financial contagion

Kevin Hassett, Director of the White House National Economic Council, pointed to yen stability as a key factor in preventing financial contagion from spreading across global markets. The remarks land at a moment when the Japanese currency is trading near multi-decade lows against the US dollar, and Japanese officials are openly discussing intervention to stop the bleeding. Why yen weakness keeps policymakers up at night The Japanese yen has been sliding for months, hitting lows against the dollar not seen in decades. Japan’s Finance Minister has signaled that all options remain on the table, including direct currency intervention. The concern isn’t just about the yen itself. It’s about what happens to Japanese government bonds when the currency weakens dramatically. JGB yields have been fluctuating in ways that unsettle market participants, raising fears about liquidity pressures that could cascade beyond Tokyo. The US-Japan financial feedback loop Hassett’s focus on yen stability reflects something that often gets lost in domestic economic debates: US and Japanese financial markets are deeply entangled. Japan remains one of the largest holders of US Treasury securities. When Japan...