New Japanese PM Senahi Takahichi announced robust stimulus package on October 24th, 2025.

Policy shift caused Japanese 40-year bond yields to rise from 3.37% to 4.21% by January 20th.

Yen continued slide against dollar, bottoming at 159 yen/dollar on January 14th, marking 35% drop over 5 years.

Dollar is lower against most other developed currencies, making yen weakness particularly troubling.

Japan holds $1.2 trillion of US Treasury bonds, so economic shock in Japan could force sell-off affecting US markets.

Threat of economic shock in Japan has serious consequences for United States.

US Treasury and Bank of Japan conducted rate check on January 23rd, contacting currency desks for yen prices, implying potential intervention.

Without actual intervention, two governments pushed yen 4% higher.

Japan's fiscal issues don't seem to be going away anytime soon, suggesting story is far from over.