Japan's Debt Dilemma May Doom Any FX Intervention, Brooks Says.

Japan's massive government debt, which is more than 250% of the nation's economy, is likely to prevent any efforts to strengthen the yen, according to Robin Brooks, a former chief currency strategist at Goldman Sachs. The Bank of Japan is incentivized to keep interest rates low to manage the government's costs, which counteracts attempts to increase the value of the yen. Japan's adherence to low interest rates has resulted in a significantly weaker yen, losing over a quarter of its value against the US dollar since March 2022. However, there are doubts about the effectiveness of government intervention due to countervailing pressures. [Extracted from the article]