This article appears as part of the Money HQ with Ben Stark newsletter.

Japan, one of the world's largest economies, is struggling with a falling currency. The yen has been weakening against the US dollar, reaching its lowest level in almost 40 years.

It’s also fallen against other currencies, including the pound. While that may sound like a problem confined to the other side of the world, it has become significant enough for both Japan and the US to step in and try to stabilise the situation. 

Global investors as well as central banks are paying attention. It is a case of “what happens in Japan may not stay in Japan...” A prolonged decline in the yen has the potential to affect global bond markets, as well as borrowing costs for mortgage rates in the UK. 

Need for action – Japan’s yen has fallen to multi-decade lows 

Why is the yen so weak? 

For many years, Japan has faced slow economic growth, weak consumer spending and periods of falling prices. To provide support, the Bank of Japan has kept interest rates much lower than those in most other developed countries.........

© Herald Scotland