The Bank of Japan has announced it will not raise interest rates amidst current market volatility. Despite intentions to support the yen by increasing rates and tightening monetary policy, the looming recession and towering national debt have hindered these efforts.

This decision underscores the complex interplay between Japan’s financial strategies and U.S. monetary policy, highlighting the strategic alliance in the Pacific.

Breaking the Yen Carry-Trade as a part of the Eurodollar offshore market, which the Federal Reserve cannot control by direct monetary policy, was the objective of the last move of the BoJ. But the 'professionals' at the Federal Reserve would probably not have guessed that a small interest rate hike in Japan would trigger such a shock on the markets to recalibrate risk profiles.

The Federal Reserve is determined to protect the dollar's future amidst these challenges as the growing alliance of BRICS start to move away from the dollar as a settlement layer and reserve asset at an accelerating pace, increasing pressure on the reserve currency.