@jakeclaverqfop: Lending dollars to Japan and having them immediately sell those dollars for yen weakens the US dollar directly. Lending euros instead lets Japan sell euros for yen, which strengthens the dollar relative to the euro rather than weakening it. The euro has enough strength to absorb that exchange without the same damage to dollar valuation. The complication is that Japan now owes the repayment in euros, adding a currency repayment risk on top of the existing leverage.

Jake Claver

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Region: US

Saturday 26 September 2026 13:04:41 GMT