Yen Collapse Against Dollar Continues

The Dollar/Yen has broken out. This means the Yen is now collapsing against the U.S. Dollar and will likely continue unless the Bank of Japan intervenes.

A weakening Yen is negative for Japanese citizens as it makes imports more expensive. Since Japan is an island nation, imports are a big part of the economy. This can and will translate into continued inflation and make it harder for the Japanese Central Bank to keep interest rates low.

Japan has a whopping 263% debt-to-gdp ratio. This means rising interest rates can literally cause a collapse as borrowing costs will soar.

Ultimately, the Bank of Japan will likely have to attempt an intervention, however, with insane levels of debt, one has to wonder how much the global powers will tolerate their debt levels.