Yen Slide Turns Intervention Risk Into Global Funding Threat

Yen weakness became the week's clearest fault line, moving from a four-decade low toward intervention risk and crisis scenarios. US rate expectations reversed as softer signals and weak hiring displaced the initial hawkish stance, while equities continued to rise.

The dollar's strength transmitted that adjustment through emerging-market currencies and into a more fragmented carry-trade funding mix. In Europe, falling inflation reduced pressure for another ECB hike without ending its data-dependent caution.