Bloomberg Surveillance · Tuesday, August 4, 2026
The US dollar and Japanese Yen are seen as increasingly intertwined, almost forming a single currency block. This dynamic is influenced by factors like foreign participation in US Treasury auctions and the need for global financial stability. Any shifts in the Yen's strength are expected to impact other Asian currencies.
“And I think for me anyway, it was kind of implicit that the dollar and Japanese en were one currency block. Now that that's a little bit more explicit. What is yen strength? How does that weigh on other low yielding emerging market develop market currencies out there?”
“Well, I think that that's just you know, secondary hope from the Treasury that, apart from sort of helping keep US yields down, that if the yen strengthens, it will spill over into other Asian currencies. You know, if you're a Korea or Taiwan or Thailand, it's hard for your currency to go up when the end is going down, that's right, And you know they're hoping that this will sort of lever everybody else down.”
“The en and the dollar are inexorably intertwined. Their linked in so many different ways, be it the assets that they hold in dollars that we hold that are in yen, the auctions, everything I'm talking about. So you have to look at it one system, and I think the US government is right to, you know, lend support to what the Japanese officials and authorities are trying to do here.”