As a journalist, I would suggest that investors pay close attention to the foreign exchange markets, especially the Japanese yen. For years, Japan’s government has been binging on debt, which proportionately is twice that of ours. This has been compounded by the suppression of interest rates, making it difficult for Japan to address its economic challenges.
With inflation forcing higher borrowing costs, the era of free money is over. The yen is weakening, which will set off serious economic and political shock waves. Expect talk of a chain reaction of Japan’s devaluing its currency and instituting tariffs.
But Tokyo is not alone here. All currencies are wobbly due to global economic instability and uncertainty. Get ready for noise about tariffs, devaluations and trade restrictions—all reminiscent of the beggar-thy-neighbor actions of the 1930s that led to WWII.
Investors should closely monitor these developments as they could have significant impacts on their investments and portfolios in both the short and long term. It is important to stay informed and proactive in managing your investments during times of market volatility.