Behind the AI stock market bubble lies a weak yen

AI Summary

The weak Japanese yen significantly influences global stock prices, contributing to the AI stock market bubble despite geopolitical rivalries and formation of competing trade blocs. Japanese authorities have recently intervened in foreign exchange markets to stabilize the yen.

The world might be dividing into rival camps and competing trade blocs, but international capital flows remain footloose and fancy free. In so doing, they pose a threat to what remains of stability in the real economy. A good example of this growing potential for international contagion is the influence of the weak yen on global stock prices. The Japanese currency is expected to remain weak for the foreseeable future – despite recent official intervention in foreign exchange markets by Japan and...