Treasury Secretary Scott Bessent’s decision to join Japan in supporting the yen was the first joint intervention of its kind for decades and took investors by surprise. There’s a respectable case for such cooperation: The U.S. and Japan can both benefit, at least for a while. But the policy fails to tackle the underlying problem and could easily backfire — not least by drawing the Federal Reserve into exchange-rate policy at an especially awkward moment. In recent months, the yen has fallen to its weakest level against the dollar in 40 years. This is partly due to growing concern about inflation, which the currency’s depreciation (in a familiar vicious circle) has compounded. Supporting the yen eases the pressure on prices and helps stabilize currency markets. Acting alone, though, Japan would need to buy yen with dollars from its reserves. This would mean selling U.S. Treasuries and pushing dollar interest rates higher. Desirable as stabilizing the yen might be for the U.S. and Japan alike, Bessent doesn’t want to make borrowing more expensive for Americans. He hopes to inte
