A OPERAÇÂO DE RESGATE DO IENE E DOS TREASURIES

Summary

Fernando Ulrich dissects the historic US Treasury intervention to buy Japanese yen, the first since 1998. He argues this coordinated action with the BOJ aims to weaken the dollar and marks a new era of currency activism. The analysis covers the end of the classic yen carry trade, fiscal risks in Japan, and the positive spillover for emerging market currencies like the Brazilian real, while cautioning that the ultimate cost will be more inflation.

• US Treasury sold euros to buy yen in a coordinated intervention not seen since 1998.
• The operation aims to strengthen the yen and weaken the dollar, preventing BOJ from selling US Treasuries.
• Japan's fiscal problems are deepening, with a failed bond auction and JGB yields at multi-decade highs.
• The classic yen carry trade regime is declared broken post-2025 tariff war, now driven by fiscal fears.
• US policy shift toward a weaker dollar is expected to boost emerging market currencies, including the Brazilian real.
• The intervention raises concerns about the long-term reserve status of US Treasuries.
• More such interventions globally point to persistent currency debasement and higher inflation.