Eurodollar University The Japanese Yen Just Crossed a Dangerous Line
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Dec 28, 2025 The puzzling weakness of the Japanese yen takes center stage as policy rates rise. Despite government interventions, the yen continues to decline, highlighting the limitations of such strategies. Jeff Snider analyzes India and China as contrasting case studies, revealing deeper issues behind currency movements. He argues that global dollar-credit conditions, rather than mere interest rates or trade balances, play a crucial role. The discussion wraps up with insights into how recent banking shocks have heightened the eurodollar premium, influencing global FX dynamics.
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Currencies Signal Hidden Eurodollar Forces
- Currency moves often signal global monetary conditions that officials miss.
- Jeff Snider argues the yen, rupee, and yuan reveal synchronized eurodollar-driven forces beyond simple policy fixes.
RBI's Last-Minute Dollar Sales
- The Reserve Bank of India sold dollars aggressively into the close to punish speculators.
- Jeff Snider calls that response a performative puppet show that rarely changes medium-term currency paths.
Rupee Weakness From External Financing Needs
- India's rupee weakness stems from a growing trade deficit and external dollar financing needs.
- Jeff Snider links the rupee's fall to reduced eurodollar willingness to extend import dollars, not to speculators.