This country’s currency is at its weakest since 1986, debt levels are unsustainable and economic growth has largely stalled. Recently, its exchange rate’s precipitous fall forced the US Treasury to intervene and prop up the currency — the first time in 28 years. Before you start wondering, this is modern-day Japan.

Japan has suffered from years of economic stagnation. Prime Minister Sanae Takaichi has recently pushed a large fiscal stimulus in response. But since Japan already carries an eye-popping debt burden — a debt-to-GDP ratio above 200 percent — the stimulus is driving the yen down. Markets read more spending and more debt as fiscally destabilizing.

The yen’s slide is a function of investors’ low confidence in Japan’s fiscal future, and there is not much Tokyo can do about it. The surest way to stabilize the currency would be to raise interest rates, but the higher rates go, the more unsustainable Japan’s debt becomes. Given this catch-22, US intervention on the yen’s behalf has taken on added resonance.

US intervention in currency markets is an extremely rare event, but an activist pattern is now emerging under Treasury Secretary Scott Bessent. The US also intervened in October last........

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