👉 The "yen fumes" refer to the economic and political tensions that have arisen from Japan's prolonged reliance on the U.S. dollar, particularly the yen, as its primary currency. This dependency stems from Japan's massive trade surplus, where it exports more than it imports, leading to a significant accumulation of foreign reserves in the form of dollars. When global financial conditions tighten or the U.S. Federal Reserve raises interest rates, the value of the yen tends to appreciate against other currencies, making Japanese exports less competitive and potentially harming the economy. This has sparked concerns in Japan about its economic sovereignty and the potential for a devaluation of the yen, which could trigger inflation and destabilize financial markets. The term "fumes" captures the growing unease and uncertainty among policymakers, businesses, and investors regarding the long-term implications of this currency dynamic.
