Why the weak yen matters for us all and others not happy about their weak currency/Other must reads

I want to touch upon the yen again and why the weakness matters for us here. It matters because the Japanese are the largest foreign owner of US Treasuries at $1.15 Trillion as of 1/31 (we'll get fresh data tomorrow). It matters because Japan imports about 97% of its energy needs according to the US Energy Information Administration as of 2022 when in 2023 they last updated their stats. I'm guessing though it's now less than that as more nuclear plants have been turned on in Japan but their import needs are very high, likely above 90% and the weaker yen makes it more expensive. So connecting the two, the weaker yen and the need to pay up for their higher cost energy inputs means the Japanese sell US Treasuries to help finance it, leading to higher interest rates in the US. 

https://www.eia.gov/international/analysis/country/JPN

And the weak yen leads to higher Japanese bond yields because of worries that inflation will continue higher in Japan. That yield move up then flows into higher European and US yields and you can now understand why a weak yen really matters here for all of us. 

Overnight the 10 yr Japanese inflation breakeven closed a hair shy of the highest level since this security was introduced in 2013 at 1.49%. The 10 yr JGB yield was up almost 1 bp to .87% while the 40 yr yield closed up by 2 bps to a fresh 13+ yr high. 

Yen in white, Oil in orange

Japanese holdings in US Treasuries in white/Oil prices in orange

Japan 10 yr Inflation Breakeven

40 yr JGB Yield

And the US dollar strength against a variety of currencies is now getting some upset outside of the Japanese where verbal intervention has done nothing to stem the weakness. A statement from the South Korean's said "Foreign exchange authorities are closely watching exchange rate movements, supply and demand dynamics in the foreign exchange market and other factors with special vigilance...Excessive one-sided moves in the foreign exchange market are not desirable for the Korean economy."

The Bank of Indonesia actually intervened to buy the rupiah as it fell to a 4 yr low vs the US dollar. See below the intraday rally in the rupiah after the intervention.