Scott Bessent fired a currency bazooka, but global finance still looks like a ‘giant Jenga tower’ propped up by a Japanese yen that’s in deep trouble

The first U.S.-Japan joint intervention in three decades aimed at boosting the yen has come and gone without doing much to ease anxiety in currency markets.

Treasury Secretary Scott Bessent’s notepad suggested the U.S. bought $5 billion-$10 billion worth of yen, while Japan’s move topped $50 billion. The exchange rate initially strengthened to about 157 yen per dollar from nearly 164, but has since given back some gains and hovered around 159 on Friday.

To be sure, efforts to prop up the yen were seen as short-term measures to address the symptoms rather than the root causes of the currency’s weakness. Those include Japan’s massive debt that exceeds 200% of GDP, fiscal stimulus that’s expected to worsen the deficit, and a central bank that’s been slow to raise rates in the face of high inflation.

But given that the yen’s recent instability was enough to trigger the U.S.-Japan intervention, a key underpinning of global financial markets appears riskier.

“Now traders are watching the ‘yen carry trade,’ where cheap yen borrowing funds bets on higher-yielding assets worldwide, and wondering if it’s about to blow up,” Wall ...