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A plunging Japanese yen has Washington taking one of its rarest financial actions in years.
After the US joined Japan in a rare effort to buy Japanese yen and support the struggling currency, Treasury Secretary Scott Bessent said (1) the Trump administration would do “whatever it takes” to keep supporting the yen.
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He added that the US would support Japan “in a way that helps the American economy, the American taxpayer.”
The joint intervention (2), the first coordinated US-Japan effort to support the yen since 2011 (3), comes after the Japanese currency sank to roughly 40-year lows of around ¥164 per US dollar, before rebounding to about ¥156 following Friday’s intervention.
Why the yen’s strength matters
A stronger (or weaker) yen may sound like Japan’s problem, but eventually, it affects what Americans pay for some imported goods.
Imagine a Toyota vehicle manufactured in Japan sells for ¥4.5 million. At an exchange rate of ¥164 per US dollar, that vehicle costs an American importer roughly $27,400 before tariffs, shipping, dealer markups and taxes.
If coordinated intervention helps strengthen the yen to ¥150 per dollar, the same vehicle would cost roughly $30,000. That’s an increase of about 9.5% driven solely by the exchange rate.
Consumers won’t automatically see a 9.5% hike at the dealership. Car manufacturers frequently cushion exchange-rate swings (4) by absorbing the costs into their profit margins or using financial hedging.
But exchange-rate shifts are one factor that can influence what Americans ultimately pay for imported Japanese products, including vehicles, electronics, cameras and industrial equipment.
Ironically, Japan has been dealing with the opposite problem. The yen’s prolonged weakness has made imported goods more expensive for Japanese households, fueling inflation and weighing on Prime Minister Sanae Takaichi’s already-plummeting approval ratings (5).
Read More: Millionaires under 43 hold only 25% of their wealth in stocks. Here’s where their money is actually going
Why is Washington getting involved?
Bessent insists the intervention isn’t about making Japanese products more expensive.
Instead, he argues the yen has become “substantially undervalued,” increasing the risk that other countries could weaken their own currencies to stay competitive.
The Treasury secretary also said supporting Japan helps protect the American economy by keeping financial volatility “offshore.”
Another concern is Japan’s position as the largest foreign holder of US Treasuries. If Tokyo sold those bonds to raise dollars and defend the yen, Treasury prices could come under pressure, pushing yields — and potentially borrowing costs for Americans — higher.
To reduce that risk, Bessent said he’d support expanding the Federal Reserve’s Foreign and International Monetary Authorities (FIMA) Repo Facility, which allows major central banks to temporarily borrow dollars against their Treasury holdings instead of selling them outright.
But even if the intervention succeeds, it won’t eliminate every ripple from a stronger yen. Exchange-rate shifts can still influence the prices Americans pay for imported goods over time, adding another variable to an inflation picture that has already strained many household budgets.
While no one can control currency markets or inflation, investors can control how prepared their portfolios are if prices continue climbing.
Consider assets that may hold up during inflation
For decades, investors have turned to assets that have historically behaved differently than cash or traditional stock portfolios during periods of inflation and economic uncertainty. Here’s a look at some of the most popular options for protecting yourself from inflationary impacts both foreign and domestic.
Get going with gold
If concerns about inflation or currency volatility have you rethinking your portfolio, some investors choose to diversify with assets that have historically held their value during periods of economic uncertainty. Gold is an oft-cited example, thanks to its inherently limited supply, role in international banking and inability to be printed at will — unlike with fiat currency.
And for investors, there are better options than keeping bullion beneath your bed.
One option is a gold IRA, which lets you hold physical gold and other precious metals inside a tax-advantaged retirement account.
Goldco can help you get started with a gold IRA backed by physical precious metals while preserving the tax benefits of an IRA.
With a minimum purchase of $10,000, the company offers free shipping and access to a library of retirement resources. They’ll also match up to 10% of qualified purchases in free silver.
If you’re wondering whether adding precious metals makes sense for your retirement strategy, you can download Goldco’s free gold and silver information guide to learn more. Just remember: gold is typically best deployed as one part of an otherwise well-diversified portfolio.
Craft a plan with crypto
Unlike government-issued currencies, Bitcoin operates independently of central banks and government intervention. Actions like coordinated currency interventions demonstrate why some investors want at least part of their wealth in assets whose supply isn’t controlled by policymakers.
If you’re looking to diversify beyond traditional stocks and ETFs, Robinhood Crypto lets you buy and sell cryptocurrencies with as little as $1.
With some of the lowest average trading costs in the U.S., you could end up with up to 2.7% more crypto compared to other platforms.
Robinhood Crypto makes it easy to make investing a habit with recurring buys on a fixed schedule, while giving you access to all your favorite coins — from Bitcoin and Ethereum to Solana, Dogecoin, XRP, and more.
You can also transfer crypto securely to other wallets, set custom price alerts, track market trends, and manage your portfolio all in one place.
Robinhood ensures the security of your cryptocurrency is a top priority, with the majority of coins held in offline cold storage. Robinhood also carries crime insurance against theft and cyber breaches, and 24/7 customer support is available if you need help.
Rebalance with real estate
Some investors also diversify into private real estate, an asset that doesn’t always move in lockstep with public markets.
While owning rental properties outright can provide steady income and long-term appreciation, buying and managing homes requires significant time, capital and ongoing maintenance. Aside from the capital costs, these are a few reasons why property management can quickly turn into a property nightmare.
That’s where mogul comes in. The real estate investment platform offers fractional ownership in blue-chip single-family rental properties, allowing investors to earn monthly rental income, participate in property appreciation and access potential tax benefits, without the headaches of being a landlord.
Each property undergoes a vetting process, requiring a minimum 12% return even in downside scenarios. Across the board, the platform features an average annual IRR of 18.8%. Their cash-on-cash yields, meanwhile, average between 10% to 12% annually. Offerings often sell out in under three hours, with investments typically ranging between $15,000 and $40,000 per property.
If you’re looking to diversify beyond traditional investments, you can browse mogul’s current offerings and get started with just a couple of clicks.
Secure portfolio diversity in just one move
If investments like real estate, precious metals or cryptocurrency fit into your long-term strategy, the next question is where to hold them.
Self-directed retirement accounts can offer tax advantages while allowing investors to own a broader range of assets than many traditional retirement accounts, depending on their individual circumstances.
IRA Financial gives you the freedom to invest in alternative assets like real estate, private equity, precious metals, and crypto within a self-directed retirement account. And now you can add real-time, public market investing, powered by Interactive Brokers, a trusted global brokerage.
For the first time, you can manage both traditional and alternative assets seamlessly within a single self‑directed retirement structure, all for a flat fee.
Complete the application online in minutes to open your self‑directed retirement account with stock trading access powered by Interactive Brokers.
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Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
CNBC (1); Reuters (2); Federal Reserve Bank of New York (3), (4); Nikkei Asia (5)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
